Displaying items by tag: Losses

Uber’s growth slows as it prepares for IPO

Written on Sunday, 17 February 2019 13:37

US ride-hailing colossus Uber disclosed its financial earnings for the final quarter of 2018 which showed its revenue growth has slowed ahead of its much anticipated stock market debut.

The financial figures released by Uber indicated that for the final three months of the year its loss amounted to $865 million, compared with $1.1 billion in the same period a year earlier.

The San Francisco-based firm reported revenue of $3 billion, which represented a 25 percent increase from a year earlier. Uber remains a private company, but routinely discloses some earnings information.

CEO Dara Khosrowshahi has managed to guide Uber through choppy waters since assuming the CEO role from Travis Kalanick.

He is also being tasked with the responsibility of steering the high-value startup to a stock market debut this year, and has promised greater transparency as he seeks to restore confidence in the global ridesharing leader that has been hit by a wave of misconduct scandals and has become embroiled in a series of legal battles regarding its services, particularly in Europe.

Revenue for the full year rose 43 percent to $11.3 billion, with Uber's annual loss shrinking 15 percent to $1.8 billion, according to an official statement from the startup.

Uber operates its’ rideshare business in dozens of countries and has expanded to new areas including food delivery, electric scooters and bikes. The company is recognized as the largest of the venture-backed startups with a presumed valuation of some $70 billion.

Uber CFO Nelson Chai expressed his satisfaction with Uber’s financial results and said, “Last year was our strongest yet, and Q4 set another record for engagement on our platform. Our ridesharing business maintained category leadership in all regions we serve, Uber Freight gained exciting traction in the US, JUMP e-bikes and e-scooters are on the road in over a dozen cities."

Based on gross bookings, Uber Eats has apparently become the largest online food delivery business outside of China.

Published in Apps

ZTE has suffered fresh woe just hours after it disclosed details of its settlement with the US government in which it was found guilty of breaching US export control rules in North Korea and Iran from 2010 - 2016. The Chinese vendor released its forecasted loss for 2016 - and it makes grim reading for stakeholders - ZTE have forecast a loss of $343m for 2016.

The latest financial announcement comes hot on the heels of US Justice, Commerce and Treasury department imposing a whopping fine of $892m on ZTE - with a further $300m suspended for seven years. That projected loss reflects the financial provision the company made against the $892m penalty payable as part of the settlement of the US case. It has since emerged that without that financial provision, the Chinese telecommunications colossus would have reported a net profit of CNY3.83 billion in 2016 - which would have represented a 19% increase from results in 2015.

ZTE had issued a warning almost a month ago in relation to the outcome of the US trade sanctions and what impact they would have on its financial results - and they indicated that a settlement would subsequently result in a heavy fine.

For the first quarter of 2017, ZTE expects its net profit to be between CNY1.15 billion and CNY1.25 billion, an increase of between 21 per cent and 31.7 per cent from a year earlier. Revenue is forecast to increase between 10 per cent and 20 per cent from a year earlier, driven by higher revenue in its carrier networks and consumer businesses, the company said in a statement.

CEO Zhao Xianming said that coupled with recent efforts to streamline operations and its leadership around 5G, "ZTE will be well-positioned for positive overall performance. The company anticipates continued growth and business expansion over the next several years as we continue to work with our partners around the world."

Published in Finance

A number of major US technology companies suffered a drastic decline in its stocks following the presidential election of Donald Trump – and are now quite fearful for the future under his administration. During the election campaign close to 150 tech leaders including founders of worldwide brands such as Apple, Reddit and Wikipedia penned an open letter in July - in which it warned that his nomination would be a ‘disaster for innovation.’

However, the controversial Republican candidate and New York based billionaire secured the nomination on November 8th and will now subsequently become the 45th President of the United States. His success has left the technology sector pondering its future under Trump – and already stocks have taken a huge decline since his nomination.

Trumps pre-election rhetoric sent shivers through Silicon Valley as he announced that he intended to squeeze trade on China, clamp down on immigration which is critical to many tech firms - and he also issued a warning to online giants Amazon suggesting they could have ‘a huge antitrust problem’ if he were to be successful in his candidacy.

Gene Munster, an analyst on the technology sector at US investment bank and asset management company Piper Jaffray has moved to dispel some of the fears surrounding immigration and Amazon.

Munster said: “The tech sector is in more control of its own destiny than Donald Trump and will work through these problems.”

“I think the ‘antitrust’ probe of Amazon is unlikely, and I don’t think there will be major change on skilled immigration under Trump, and there could be an increase on tariffs for electronics components and that could potentially impact companies such as Apple, but it would be equally spread over manufacturers because they all rely on imports.”

However, many tech companies could boost significantly from Trump’s pledge to lower taxes on capital repatriated from overseas, which could well benefit companies such as Apple and Google. The tech sector holds the lion’s share of an estimated $2.5 trillion (Dh9.18 trillion) held by US firms overseas.

Bob O’Donnell, a consultant at Tech-analysis Research in Silicon Valley believes there could be a lot of money repatriated by tech companies. O’Donnell said: “Tech firms could use the repatriated money for job creation, and that would be very interesting - the tech sector may get a fresh look at the kinds of services and technologies that people want to invest in under Trump.”

“For example, a major push on infrastructure investment could be a big opportunity to integrate ‘smart’ technology for services such as transportation.”

While Trump has said very little in relation to the tech sector thus far, analysts and consultants have noted that the tech industry is such a huge part of the economy that you simply can’t ignore it. However, it has also been noted and taken into account that things that were viewed as special privileges may be taken away.

Some within the tech sector are gravely concerned that a Republican administration may seek to roll back so-called ‘net neutrality’ which ultimately prohibits broadband firms from playing favorites – which could spell trouble for online video operators like Netflix and Amazon.

Many tech leaders have simply had to put the disappointment of Trump’s election result behind them and move forward. According to the Wall Street Journal, Apple CEO, Tim Cook sent a memo to staff in which he said that the only way to move forward is to do so together. Facebook founder Mark Zuckerberg brushed off the election result by stating that it would not be right to say the election of Donald Trump changes the fundamental arc of technology over time.

Published in Government