Major benchmarks waffled between positive and negative territory before closing mixed on Tuesday as investors digested a deluge of quarterly earnings reports and the prospect of a potential U.S.-China trade deal.
The Dow Jones Industrial Average (DJINDICES:^DJI) ultimately extended yesterday’s gains by about 0.1%, while the S&P 500 (SNPINDEX:^GSPC) fell modestly.
As for individual stocks, earnings news left shares of Uber (NYSE:UBER) and Chegg (NYSE:CHGG) moving in different directions.
Uber lost over $1 billion in Q3
Shares of Uber Technologies sank 9.9% after the ridesharing specialist announced mixed third-quarter results relative to Wall Street’s expectations.
Revenue climbed 30% year over year to $3.81 billion — helped by a 26% increase in monthly active platform consumers to 103 million — exceeding estimates for revenue to be closer to $3.4 billion. But that translated into a net loss of $1.16 billion, or $0.68 per share, significantly worse than analysts’ consensus estimates for a loss of $0.63 per share.
CEO Dara Khosrowshahi said the results “decisively demonstrate the growing profitability of [Uber’s] Rides segment,” where adjusted EBITDA climbed 52% to $631 million, more than covering the company’s “corporate overhead” of $623 million.
Uber also revised its outlook for a consolidated full-year adjusted EBITDA loss of $2.8 billion to $2.9 billion, marking a $250 million improvement from its previous target range. But given the company’s steep bottom-line shortfall to start the second half — and until Uber shows more tangible evidence of improving net profitability — it’s no surprise to see the stock falling in response.
Chegg’s A+ quarter
Meanwhile, shares of Chegg popped 14.4% after the education technology leader announced strong third-quarter results and raised its full-year outlook.
Revenue climbed 27% year over year to $94.2 million, translating into adjusted (non-GAAP) net income of $23.8 million, or $0.18 per share. Analysts, on average, were anticipating adjusted earnings of only $0.08 per share on revenue closer to $89.2 million.
CEO Dan Rosensweig called it “another great quarter,” punctuated by a 29% increase in Chegg Services subscribers, to 2.2 million.
“Our strategy to provide direct to student services in their academic journey continues to deliver fantastic results, and we couldn’t be more excited to expand into skills-based learning with the addition of Thinkful,” Rosensweig added. Chegg struck an $80 million deal to acquire “coding bootcamp” specialist Thinkful in early September.
Chegg also increased its full-year 2019 guidance to call for revenue of $407 million to $409 million, and introduced a preliminary target for full-year 2020 revenue of roughly $520 million. By comparison, most analysts were modeling lower 2019 and 2020 revenue of $402 million and $492 million, respectively.
