Uber’s stock surges despite big Q2 loss

WASHINGTON, Aug 4, (AP): Uber’s effort to meld its pioneering ride-hailing service with food and freight delivery showed progress during the past quarter even though the company sustained a huge loss stemming from a sharp decline in its outside investments.

Looking past Uber’s second-quarter loss of $2.6 billion announced Tuesday, Wall Street celebrated a significant milestone that raised hopes that Uber is on the verge of becoming a self-sustaining business.

The good news arrived Tuesday in the form of a key metric known as free cash flow. Uber generated $382 million in cash during the April-June period, the first quarter in the company’s 13-year history that it didn’t hemorrhage money.

Uber has now been profitable for four consecutive quarters under a financial yardstick called EBIDTA, or “adjusted earnings before interest, taxes, depreciation and amortization.”

By that measure, Uber earned $364 million during the second quarter, breezing past industry analyst projections of $277 million, according to FactSet Research.

Uber still sustained a massive loss that translated into $1.33 per share primarily caused by declines in Uber’s stake in Aurora, a self-driving car company, and a Singapore transportation service called Grab.

CEO Dara Khosrowshahi said Tuesday that he is confident the company will build upon its momentum and possibly surpass a previously set goal of generating $1 billion in free cash flow annually.

Khosrowshahi said he now believes Uber is in its strongest position since he was hired as the company’s top executive nearly five years ago. Khosrowshahi took over after co-founder Travis Kalanick was pushed out amid a series of scandals, from sexual harassment claims and cover-ups, to allegations of stealing self-driving car technology.

Shares of Uber Technologies Inc., based in San Francisco, jumped nearly 19% to close Tuesday at $29.25. The stock is still down by 30% this year, and far below its peak of about $64 reached early last year.