Uber is the latest major firm to withdraw its 2020 financial guidance owing to coronavirus-related uncertainty.
In a press release on Thursday, the company told investors that it is "impossible to predict with precision the pandemic’s cumulative impact on our future financial results," and pulled its guidance on gross bookings, adjusted net revenue and adjusted EBITDA.
The company also previewed a "Contra Revenue" accounting item in its upcoming Q1 earnings, which includes a financial assistance program for drivers whose earnings are affected by the pandemic.
"We intend to account for this program as Contra Revenue, which we expect will reduce GAAP Revenue by an estimated $17 to $22 million in Q1 and an estimated $60 to $80 million in Q2," the company wrote. "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."
Uber also expects its net loss to increase in Q1 because of a reduction in the value of some of its minority equity investments. That reduction will amount to between $1.9 to $2.2 billion, the company said.
Along with widespread travel restrictions and business closures, demand for Uber rides is presumed to have dropped considerably this quarter.
Demand for online delivery has increased, however, and Uber has sought to capitalize on the shifting demand by offering grocery delivery through Uber Eats, among other measures to deal with the pandemic.
StreetLightning Videos With Jim Cramer:
- Walmart, Amazon and Costco Are Retail Winners
- Airbnb and the Future of IPOs After the Coronavirus Pandemic
- Jim Cramer Would Buy Tesla Now
- How to Pick Stocks in a Recession
- Don't Own Homebuilder Stocks During Coronavirus
- Zoom Will Recover From This Controversy