Uber delivered strong earnings and guidance.
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Ride-hailing giant Uber Technologies delivered better-than-expected first-quarter numbers, but its stock is plunging anyway.
Guidance for the second quarter also topped Wall Street forecasts. The results should be a relief to nervous investors.
Uber (ticker: UBER) reported adjusted earnings before interest, taxes, depreciation, and amortization of $168 million on sales of $6.9 billion. Wall Street was looking for Ebitda of about $134 million on sales of $6.1 billion.
Gross bookings rose 35% year over year in the first quarter of the year.
“Our results demonstrate just how much progress we’ve made navigating out of the pandemic and how the power of our platform is differentiating our business performance,” said CEO Dara Khosrowshahi in the company’s news release. “In April, Mobility Gross Bookings exceeded 2019 levels across all regions and use cases. There’s never been a more exciting time to innovate at Uber and we’re focused on executing our strategy to grow our platform profitably.”
Looking ahead, Uber expects second-quarter Ebitda of about $255 million. That’s a little better than the $246 million Wall Street expects, according to FactSet.
Uber stock was down about 1% in premarket trading, shortly after results were released. S&P 500 and Dow Jones Industrial Average futures rose about 0.4% and 0.3%, respectively.
Uber stock fell 11% in early trading after moving up its earnings report to before the opening bell Wednesday after numbers from Lyft (LYFT) severely disappointed investors on Tuesday afternoon.
Uber was originally set to release numbers after the close of trading Wednesday.
“Smart move by Dara,” said Wedbush analyst Dan Ives. Lyft stock was down roughly 25% in after-hours trading Tuesday. Lyft’s results pushed Uber stock down about 5% in sympathy.
Lyft actually reported better-than-expected first-quarter numbers, reporting adjusted earnings of about 7 cents a share from $876 million in sales. Wall Street was looking for a loss of 7 cents a share on about $850 million in sales.
But guidance sank Lyft stock. The company expects second-quarter revenue between $950 million and $1 billion, below consensus estimates for $1.02 billion, according to FactSet. Guidance for adjusted Ebitda of between $10 million and $20 million was well below analysts’ expectations of about $83 million.
“Spending like an 80’s rock star won’t fly with investors,” wrote Ives Tuesday evening. He called the first quarter solid, but spending is the issue. “Clearly, Lyft needs to ramp up its expense profile to bring drivers back onto the platform and will spend significant dollars on this effort over the coming quarters which crushed [guidance] for the year,” added Ives.
The solid earnings report hasn’t quelled all Lyft-related fears yet. Driver incentives—part of what is driving Lyft’s higher costs—came up on the company’s conference call. “Our need to increase the number of drivers on the platform is nothing new,” said Khosrowshahi. Uber has been investing to make it a preferred platform for many quarters, added the CEO.
That’s a positive for the business, but investors are still nervous.
Write to Al Root at [email protected]
