Business / Corporate

Japan's Rakuten swings to quarterly loss on Lyft and mobile service

Reuters

Rakuten Inc. reported an unexpected quarterly loss Thursday, hit by the depressed value of its investment in ride-hailing firm Lyft Inc. and heavy spending on a new wireless service.

The company said it booked a ¥1.8 billion operating loss in the April-June quarter compared with a ¥61.6 billion profit in the same period a year earlier. The market had expected a ¥5.2 billion profit, according to the average of five analysts compiled by Refinitiv.

Rakuten, whose billionaire founder and Chief Executive Hiroshi Mikitani has a seat on Lyft’s board, recorded a ¥28.4 billion unrealized loss on its stake in the ride-hailing firm for April-June, as it had warned in July. It recorded a ¥110 billion gain in the previous quarter.

The results come a day after SoftBank Group Corp. posted an unrealized loss on its stake in Lyft rival Uber Technologies Inc. for the April-June quarter. The two money-losing firms are locked in a cash-burning battle for dominance in the U.S. market.

Rakuten cited an operating loss in its mobile services business as it steps up investment in a new wireless service that is due to launch in October. The move will make it Japan’s No. 4 mobile carrier.

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