Uber bets on holiday travel demand to forecast strong fourth quarter
Uber shares are up about 95% year to date
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Uber Technologies forecast fourth-quarter adjusted core profit and gross bookings above market expectations on Tuesday, betting that the holiday season would boost demand for its ride-hailing and food-delivery services.
It, however, missed Wall Street's profit target for the July-September period and posted its lowest revenue growth since 2021, which the company said was due to an accounting change.
Uber shares fell as much as 7% in premarket trading following the results before gaining 1.5%.
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Uber
After a bruising 2022, the dominant U.S. ride-hailing company has benefited from the return-to-office push by companies and resilient travel demand despite inflation.
Uber expects adjusted core profit, a key profitability measure, between $1.18 billion and $1.24 billion. Analysts expected $1.15 billion, LSEG data showed.
Transport apps including Uber and Zipcar are seen on a smartphone in London on Nov. 25, 2019. (DANIEL LEAL/AFP via Getty Images / Getty Images)
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"Consumer demand on our platform remains healthy as we enter the busiest period of the year," CEO Dara Khosrowshahi said in his prepared remarks.
Uber CEO Dara Khosrowshahi discusses the company's latest product innovations at its Go Get event in NYC on May 17, 2023. (Daniella Genovese / Fox Business / Fox News)
"This trend continued into the fourth quarter as we achieved all-time highs in October for overall trips and gross bookings, driven by strength across both mobility and delivery."
Gross bookings, or the total dollar value earned from its services, is expected to be between $36.5 billion to $37.5 billion compared with expectations of $36.31 billion.
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Rival Lyft has cut ride-sharing prices this year to boost its market share. But analysts said the strategy has had little impact on Uber, whose business includes a sprawling food-delivery operation.
Lyft's shares were up 1.6%. The company will report earnings on Wednesday.
Lyft
Revenue rose 11% to $9.29 billion , but missed analysts' average estimate of $9.52 billion. This is compared to a more than 14% growth in the prior quarter and a 70% surge a year ago.
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Adjusted core profit of $1.09 billion beat expectations of $1.02 billion, but net earnings per share was 2 cents lower than expectations of 10 cents.