Uber Shares Collapse After Disappointing Second Quarter

Shares of ride hailing company Uber were falling dramatically on Thursday after the company reported disappointing financial results for the second quarter.

The company reported revenue of $3.17 billion for the quarter while $3.36 billion was expected. Losses also exceeded $5 billion. Net losses hit $5.24 billion. A loss per share at $4.72 was worse than the loss of $3.12 that was expected.

“We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. I think our break even is something that we can push the company to break even if we really wanted to frankly,” said CEO Dara Khosrowshahi on CNBC’s Deirdre Bosa.

“No doubt in my mind that the business will eventually be a break even and profitable business,” he added.

“Our platform strategy continues to deliver strong results, with Trips up 35% and Gross Bookings up 37% in constant currency, compared to the second quarter of last year,” said Khosrowshahi on the earnings report. “In July, the Uber platform reached over 100 million Monthly Active Platform Consumers for the first time, as we become a more and more integral part of everyday life in cities around the world.”

The company’s core ride-hailing business generated $12.19 billion in gross bookings during the second-quarter which did beat analysts’ estimate of $12.11 billion in gross bookings.

Uber Eats business saw $3.39 billion in gross bookings which trailed analysts’ expectations of $3.51 billion in gross bookings.

Khosrowshahi stated, “The Eats business is still a business that carries very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world. With the eats business there’s a lot of capital chasing a lot of growth and we’re the leader on a global basis. So, I don’t expect that business to be profitable in the next year or year after frankly.”

The company also recently slashed 400 jobs from its marketing department.

“While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction,” said Uber chief financial officer Nelson Chai.

Disclaimer: We have no position in Uber Technologies Inc. (NYSE: UBER) and have not been compensated for this article.