Uber CEO Dara Khosrowshahi says he expects Uber and Lyft will be easing off their price-slashing battle soon. Richard Drew/AP hide caption
For most companies, losing $1 billion in a quarter would be a big disappointment. But Uber's first report as a publicly traded company was actually better than it had warned investors to expect.
The ride-hailing and food-delivery giant brought in more than $3 billion in revenue in the first three months of 2019 — a 20% jump from the same quarter a year earlier.
Before going public earlier this month, Uber had told investors to be prepared for an even larger loss in the first quarter. Now, it's telling them it expects the price-cutting competition that has hurt its profits to ease up soon.
Uber has burned through money for years by spending heavily on growth — offering financial incentives to attract new riders and drivers, and taking on the costs of expanding into new markets around the world. So far, that growth has never translated into profits.
Uber's IPO did not go well. Despite pricing its shares relatively conservatively, at least compared with early expectations, the company saw its stock drop immediately, and it finished day one lower than it started. Since then, Uber shares have never sold at the value set for the initial offering.
Wall Street liked what it saw in Uber's first earnings report. Its stock was up more than 1% in early trading Friday.
Uber's earnings report shows the company continues to expand rapidly, especially in Uber Eats, its food delivery branch. In South America, however, the company saw revenue shrink as it faces intense competition from rival Didi.
In the U.S., meanwhile, Uber is facing off with its smaller competitor Lyft.
Around the world, competition in ride-hailing is driving down prices and contributing to Uber's losses. In the earnings call on Thursday, Uber CEO Dara Khosrowshahi said he expects Uber and Lyft, at least, will be easing off their price-slashing battle soon.
"The competition is going to be more healthy," he said. "It's going to be based on brand and product and technology, which we think is the right way to compete, versus throwing money at the problem."
He also acknowledged that Uber has faced headwinds in the U.S. due in part to the tremendous damage to the brand over the past few years — marked by sexual harassment allegations, reports of illegal business practices, data breaches and other scandals.
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Uber's earnings print inspires new bull Seeking AlphaAtlantic Equities upgrades Uber (UBER) from Neutral to Overweight after the first post-IPO earnings report but trims the PT from $55 to $52, implying a 31%
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© Reuters. Traders work on the floor at the NYSE in New York
By Amy Caren Daniel
(Reuters) - U.S. stocks inched higher for the first time this week on Thursday, as President Donald Trump said trade talks with China were going well, offering a glimmer of hope to markets roiled by worries that a protracted dispute would slow global growth.
A senior Chinese diplomat said provoking trade disputes is "naked economic terrorism", even as Trump said Beijing wanted to make a deal with Washington.
The escalating dispute has weighed heavily on Wall Street this month, putting its main indexes on track for losses of at least 5% in May. The benchmark is now 5.8% away from its all-time high of 2,954.13 hit on May 1.
"We're seeing just a little bit of a relief to markets after the selling over the past couple of days, whether it morphs into something more than that it's hard to say," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago
"Markets are focused on trade talks, or lack there of. We're starting to see more and more signs that the economy is looking more recessionary that expansionary."
U.S. treasury yields fell on Thursday and hovered near 20-month lows as investors sought safety in government bonds. [US/]
The yield curve between three-month bills and 10-year notes remained inverted, with money markets pricing in roughly two U.S. rate cuts by the start of next year.
Interest-rate sensitive bank stocks fell 0.55%, while the broader financial sector declined 0.10%.
Technology stocks, among the worst performing S&P sectors this month, rose 0.60% and boosted markets.
The sector was helped by a 11.7% jump in Keysight Technologies after the electronic measurement equipment maker reported better-than-expected quarterly results and announced a $500 million share buyback plan.
Apple Inc (NASDAQ:), Microsoft Corp (NASDAQ:) and Intel Corp (NASDAQ:) also rose and offered support.
Also helping sentiment was data that confirmed domestic economic growth accelerated in the first quarter, but there were signs that the temporary boost from exports and inventory accumulation was already fading.
At 12:52 p.m. ET the was up 81.69 points, or 0.33%, at 25,208.10. The S&P 500 was up 9.62 points, or 0.35%, at 2,792.64 and the was up 31.00 points, or 0.41%, at 7,578.31.
The energy sector fell 0.85%, the most among the four major S&P sectors trading lower.
Among other stocks, Dollar General Corp (NYSE:) jumped 7.9% after the discount retailer's same-store sales and profit topped expectations.
Viacom Inc climbed 6.1% after report that CBS Corp (NYSE:) is preparing for merger talks with the media company. CBS rose 3.6%.
PVH Corp (NYSE:) plunged 14.2%, the most among S&P companies, after the Calvin Klein owner cut its annual profit forecast as it grapples with tariffs and slowing retail growth.
Advancing issues outnumbered decliners by a 1.51-to-1 ratio on the NYSE and by a 1.35-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 23 new lows, while the Nasdaq recorded 22 new highs and 96 new lows.
Interest rate policy is right where it should be considering the current state of the U.S. economy, though that could change if conditions weaken, Federal Reserve Vice Chairman Richard Clarida said Thursday.
Clarida gave generally high marks to the U.S. economy and he reiterated the Fed's broader position that it will base policy on data as it unfolds.
He did, however, outline the conditions under which he might consider cutting rates, which the market is expecting and President Donald Trump is demanding.
"If the incoming data were to show a persistent shortfall in inflation below our 2 percent objective or were it to indicate that global economic and financial developments present a material downside risk to our baseline outlook, then these are developments that the [Federal Open Market Committee] would take into account in assessing the appropriate stance for monetary policy," Clarida said during a speech at the Economic Club of New York.
As things stand, he indicated policy is appropriate as unemployment remains low, inflation is around the Fed's 2% target and rates are near where the central bank considers neutral, or neither restrictive nor stimulative.
"Midway through the second quarter of 2019, the U.S. economy is in a good place," the central bank official said. "By most estimates, fiscal policy played an important role in boosting growth in 2018, and I expect that fiscal policies will continue to support growth in 2019."
The Fed's benchmark funds rate, which banks charge to each other for overnight lending and which forms a basis for most consumer rates, is targeted between 2.25% and 2.5%. That's right where the current economic variables suggest it should be, Clarida said.
Markets differ with the assessment — futures trading, which can be volatile, is currently pricing in two rate cuts by January. Fed officials, by contrast, say they are content with taking a "patient" approach, and they have forecast no moves in either direction at least through the end of 2019.
Recent signs are showing that the economy is slowing after GDP rose 3.1% in the first quarter. Worries are mounting that the U.S.-China trade war will have an impact on investment and demand, though the issue seemed to receive little attention at the most recent Fed meeting.
According to minutes released last week, central bank officials said they see rates remaining unchanged "for some time" amid an economy that continues to grow but with tame inflation.
Mark Zuckerberg, Facebook's CEO and chairman.Reuters
Mark Zuckerberg is heading for a showdown with investors on Thursday, as the Facebook boss faces a vote on whether he should remain as both CEO and chairman.
At Facebook's annual shareholder meeting in Silicon Valley, investors will vote on two proposals: to hire an independent chairman above Zuckerberg, and to rip up the firm's dual-class share structure.
The former idea, to oust Zuckerberg as chairman, was put forward by activist shareholder Trillium Asset Management, and the firm's senior vice president, Jonas Kron, will read out a message in support of his proposal during today's meeting.
With Zuckerberg in the room, Kron will make the case that Zuckerberg's enormous power has exacerbated Facebook's problems over the past two years, such as the Cambridge Analytica scandal and election meddling on the social network.
"We have watched with growing dismay as that list of controversial and damaging social impacts grew very long. And as rigorous reporting from the New York Times has shown us, having a unified chair and CEO severely limited the board's ability to provide the company the oversight it needed," he will tell Zuckerberg and the Facebook board, according to a statement sent to Business Insider.
"It is unwise to have so much power concentrated in one person," he will add, as he bids to drum up support from fellow investors. "Let us not miss this opportunity to make a simple, yet powerful change that would go a long way towards creating a successful future."
Facebook has always maintained that hiring an independent chairman would not be a good idea. "We do not believe that requiring the Chair to be independent will provide appreciably better direction and performance, and instead could cause inefficiency in board and management function and relations," it said in a filing last month.
The chance of Trillium's proposal becoming a reality is extremely slim, despite it being backed by investors that control around $3 billion of Facebook stock. A similar proposal in 2017 was popular among independent investors but was crushed because of Zuckerberg's voting power.
This is because of Facebook's dual-class share structure. Class B shares have 10 times the voting power of class A shares, and it just so happens that Zuckerberg owns more than 75% of class B stock. It means he has more than half of the voting power at Facebook.
Good morning Mr. Chairman, members of the board, fellow shareholders. My name is Jonas Kron and I am here on behalf of Trillium Asset Management and the Park Foundation to hereby move Item Number 6, seeking an independent board chair policy for Facebook.
This proposal has been co-filed by the New York City Comptroller, the Treasurers of Illinois, Rhode Island, Connecticut, and Oregon, and a multitude of smaller and faith based investors.
At its core this shareholder proposal is about the risk of concentrating too much power in one person – any person.
As proxy advisory firm Glass Lewis put it in its report supporting this shareholder proposal - "vesting a single person with both executive and board leadership concentrates too much responsibility in a single person and inhibits independent board oversight of executives …"
Facebook is incredibly powerful - with wide ranging and difficult to understand, let alone control, social impacts. Over the last two years we have watched with growing dismay as that list of controversial and damaging social impacts grew very long. And as rigorous reporting from the New York Times has shown us, having a unified Chair and CEO severely limited the board's ability to provide the company the oversight it needed.
It is these very facts about power and impact – responsibility and accountability - which highlight why a unified chair and CEO is such a misguided idea – it is unwise to have so much power concentrated in one person.
Which is why we should look to the examples of highly successful companies such as Alphabet, Apple, Autodesk, and Microsoft – to name just a few – which all have independent board chairs.
We recognize that Facebook has a lead independent director. And we acknowledge that the board has recently taken steps to articulate more clearly her powers and responsibilities. However, these recent changes are fundamentally insufficient to meet the task at hand because a lead independent director does not command the same authority as an independent board chair.
This question comes to shareholders at a critical moment. Facebook is embarking on a privacy pivot which leadership has described as requiring a completely new platform. At a time when there is little public trust in Facebook, it is navigating a regulatory landscape that is changing quickly. In this difficult and challenging environment it is important to stop and consider that the CEO position is the most demanding job in corporate America and the responsibilities of a Chairman of the Board are enormously time consuming. We need different people in these two distinctly different leadership positions.
Let us not miss this opportunity to make a simple, yet powerful change that would go a long way towards creating a successful future, not only for Facebook and its employees and its shareholders, but for individuals, families, and communities around the world.
Thank you for your time and attention – and for your support for an independent board chair.
© Reuters. Traders work on the floor at the NYSE in New York
By Amy Caren Daniel
(Reuters) - U.S. stocks rose for the first time this week on Thursday, as President Donald Trump said trade talks with China were going well, offering a glimmer of hope to markets roiled by worries that a protracted dispute would slow economic growth.
A senior Chinese diplomat said provoking trade disputes is "naked economic terrorism", even as Trump said Beijing wanted to make a deal with Washington.
The escalating dispute has weighed heavily on Wall Street this month, putting its main indexes on track for losses of more than 5% in May. The benchmark is now 5.9% away from its all-time high of 2,954.13 hit on May 1.
"The positivity in markets is very muted today, there are fractional gains," said Peter Kenny, founder of Kenny's Commentary LLC in New York.
"Uncertainty is still the primary driver on the trade front. We have increasingly seen the fear of uncertainty being priced into the market, and that is all about trade and the prospect of a slowdown."
Despite a tick up in U.S. treasury yields on Thursday, they still hovered near 20-month lows as investors sought safety in government bonds. [US/]
The yield curve between three-month bills and 10-year notes remained inverted, with money markets pricing in roughly two U.S. rate cuts by the start of next year.
Interest-rate sensitive bank stocks fell 0.54%, while the broader financial sector declined 0.24%.
Technology stocks, among the worst performing S&P sectors this month, rose 0.38% and boosted markets.
The sector was helped by a 9.6% jump in Keysight Technologies after the electronic measurement equipment maker reported better-than-expected quarterly results and announced a $500 million share buyback plan.
Apple Inc (NASDAQ:), Microsoft Corp (NASDAQ:) and Intel Corp (NASDAQ:) also rose and offered support.
Also helping sentiment was data that confirmed domestic economic growth accelerated in the first quarter, but there were signs that the temporary boost from exports and inventory accumulation was already fading.
At 11:10 a.m. ET the was up 6.11 points, or 0.02%, at 25,132.52. The S&P 500 was up 5.54 points, or 0.20%, at 2,788.56 and the was up 19.47 points, or 0.26%, at 7,566.78.
The energy sector fell 1.1%, the most among the four major S&P sectors trading lower.
Among other stocks, Dollar General Corp (NYSE:) jumped 6.8% after the discount retailer's same-store sales and profit topped expectations.
Viacom Inc climbed 4.8% after report that CBS Corp (NYSE:) is preparing for merger talks with the media company. CBS rose 2.7%.
PVH Corp (NYSE:) tumbled 14.3%, the most among S&P companies, after the Calvin Klein owner cut its annual profit forecast as it grapples with tariffs and slowing retail growth.
Advancing issues outnumbered decliners by a 1.45-to-1 ratio on the NYSE and by a 1.28-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 13 new lows, while the Nasdaq recorded 18 new highs and 69 new lows.
