Uber Technologies (UBER) - Get Report shares surged higher in pre-market trading Friday after the riding hailing group saw a surge in food delivery orders over the first quarter that helped revenues beat Wall Street forecasts.
Uber posted a near $3 billion loss for the three months ending in March, a figure that included a previously-forecast write-down of $2.1 billion, but edged past Street revenue forecasts with a top-line tally of $3.54 billion. Uber's adjusted loss for the quarter was $612 million, or 64 cents per share.
That figure was supported by a 53% increase in Uber Eats revenues as customers used the food delivery service amid coronavirus lockdown orders. Rides revenues rose 2%, to $2.47 billion, Uber said, and active platform customers rose 11% to just over 100 million.
CEO Dara Khosrowshahi, who offered to forego his 2020 salary earlier this week after announcing 3,700 job cuts, also said he sees "encouraging' signs for the group as cities re-open and economic activity slowly returns to pre-pandemic levels.
"Since I updated you last on the state of our business. And at that time, there have been some hopeful signs," Khosrowshahi told investors on a conference call late Thursday. "Cities are beginning to open up or at the very least planned for recovery, early but promising results in clinical trials for potential treatments and vaccines and perhaps most inspiring of all, global solidarity in support of those on the front line."
"But there remains a lot unknown (and) my objective is based on the old Wayne Gretzky quote, 'skate to where the puck is going, not to where it's been'," he added. "Accordingly, we're taking a hard look at our overall cost structure and our Other Bets to ensure our core business of Rides and Eats emerges stronger than ever.
Uber shares were marked 7.9% higher in pre-market trading Friday to indicate an opening bell price of $33.36 each, a move that would extend the stock's year-to-date gain to around 12%.
"UBER is seeing meaningful gains in Eats, showing increased expense discipline around business lines/overall spending, and seeing a partial recovery in some markets,' said Oppenheimer analyst Jason Helfstein, who boosted his price target on the stock by $4, to $38 per share, after last night's earnings while maintaining his outperform rating.
"Moreover, the company's hybrid Rides/Food structure has allowed drivers to be re-purposed during COVID-19 and keep more users engaged (and using loyalty program), potentially reducing marketing and promotion spending post-pandemic," he added.
Uber said Wednesday that it will cut 3,700 jobs while waiving Khosrowshahi's annual salary, as it grapples with a plunge in April ride traffic amid the coronavirus pandemic.
Late last month, Uber rival Lyft (LYFT) - Get Report said it would lay off nearly 1,000 employees, around 17% of its entire workforce while reducing salaries and cutting costs as lockdowns reduce ride traffic to near zero.