The ongoing coronavirus pandemic has caused Uber to withdraw its 2020 guidance as it anticipates a $1.9-$2.2 billion impairment charge and $17-22 million in first-quarter losses.
“Given the evolving nature of COVID-19 and the uncertainty it has caused for every industry in every part of the world, it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” Uber said in a statement on Wednesday (April 16).
The company retracted its 2020 forecast for gross bookings, adjusted net revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA). It is also anticipating a GAAP revenue drop of $17-$22 million in the first quarter and $60-$80 million in the second quarter.
Further, the rideshare giant said it is expecting a $1.9-$2.2 billion impairment charge — a writeoff for worthless goodwill — against the carrying value of its minority equity investments. Uber’s latest annual report shows it has minority stakes in Didi, Grab, Yandex.Taxi and Zomato.
Its COVID-19 financial assistance program for drivers will be accounted for as contra revenue — a deduction from the gross revenue — the major cause of the estimated first-quarter revenue losses. Second-quarter losses are estimated to be $60-$80 million.
“To help investors assess the impact of COVID-19 on our financial position, and in accordance with recent SEC staff guidance, we intend to exclude the impact of certain COVID-19-specific expenses from Adjusted Net Revenue and from Adjusted EBITDA,” according to the statement.
Uber will hold its quarterly conference call on May 7 to discuss its financial results for the first quarter of 2020.
“As one of the world’s largest platforms for work, we continue to believe that we will play an important role in the economic recovery of cities around the globe,” the statement said.
In January, Uber CEO Dara Khosrowshahi said the company had the best chance of being profitable out of all of the ride-hailing competitors.
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