August 8, 2019 / 6:31 AM / 3 months ago

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

FILE PHOTO: A campaign advertising of Rakuten Pay, a QR code mobile payment system operated by Rakuten, is displayed at a coffee shop in Tokyo, Japan May 30, 2019. REUTERS/Issei Kato/File Photo

TOKYO (Reuters) - Japan’s Rakuten Inc (4755.T) reported an unexpected quarterly loss on Thursday, hit by the depressed value of its investment in ride-hailing firm Lyft Inc (LYFT.O) and heavy spending on a new wireless service.

The company said it booked a 1.8 billion yen ($17 million) operating loss in the April-June quarter compared with a 61.6 billion yen profit in the same period a year earlier. The market had expected a 5.2 billion yen profit, according to the average of five analysts compiled by Refinitiv.

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

The results come a day after SoftBank Group Corp (9984.T) posted an unrealized loss on its stake in Lyft rival Uber (UBER.N) for the April-June quarter. The two money losing ride-hailing 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.

Reporting by Sam Nussey; Editing by Darren Schuettler and Muralikumar Anantharaman

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