Uber sees encouraging signs in reopening markets, posts $2.9 billion lossUber sees encouraging signs in reopening markets, posts $2.9 billion loss
FILE PHOTO: An Uber Eats food delivery courier closes a bag with an order in central Kiev

By Akanksha Rana and Tina Bellon

(Reuters) – Uber Technologies Inc <UBER.N> said on Thursday it saw encouraging signs in markets hit by the coronavirus epidemic as it posted a 14% rise in revenue growth, supported by its Uber Eats food-delivery business.

But the Silicon Valley company overall posted a $2.9 billion (2.3 billion pounds) loss in the first quarter. The loss includes a $2.1 billion pretax writedown of the value of some of Uber’s minority investments.

Shares of Uber dropped less than 1% to $30.70 in after-hours trading, but had been up 11% throughout the day following stronger-than-expected results by smaller ride-hailing rival Lyft Inc <LYFT.O>, which reported first-quarter results on Wednesday.

Excluding the $2.1 billion of writedowns, Uber reported a loss of 64 cents per share, compared with Wall Street analysts’ expectations of an 88-cent loss, according to IBES data from Refinitiv.

Uber had originally promised to be profitable on an adjusted basis before interest, taxes, depreciation and amortization by the end of this year, but withdrew its full-year guidance on April 16, citing the uncertainty surrounding the global virus outbreak.

The company on Thursday reported a $612 million adjusted EBITDA loss for the first quarter.

It recorded $3.54 billion in revenue in the first three months of the year, roughly in line with an average analyst estimate for $3.51 billion by Refinitiv.

Chief Executive Dara Khosrowshahi in a statement said the company had taken quick action after its ride-hailing business was hit hard by the ongoing pandemic.

“Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up,” he said.

Revenue at Uber’s ride-hailing business, which contributes the bulk of the company’s revenue, increased 2% on a yearly basis, but dropped more than 18% from the prior quarter.

Revenue from restaurant food deliveries rose by more than 11% on a quarterly basis, but yearly revenue growth at the unit decelerated significantly from the previous quarter.

Nearly two-thirds of Uber’s revenue is generated in the United States and Canada, where authorities began ordering people to stay indoors in the middle of March.

Uber’s competitor, Lyft, on Wednesday reported a surprise 23% jump in revenue and said strict cost-cutting measures ensured it remained on a “path to profitability.”

Lyft shares surged more than 20% on Thursday.

Unlike Lyft, whose sole focus is transporting people and which operates only in the United States and parts of Canada, Uber’s business is global. Some European and Asian countries enacted virus-related curbs earlier in the quarter.

Uber’s food delivery business has traditionally been a drag on the company’s bottom line due to heavy spending on customer promotions and driver incentives.

(Reporting by Akanksha Rana in Bangalore, Tina Bellon in New York; Editing by Peter Henderson and Matthew Lewis)