Nov. 4 (Reuters) – Uber Technologies Inc (UBER.N) on Thursday announced its first profitable quarter on an adjusted basis since launching more than a decade ago with its two largest segments, ridesharing and restaurant delivery , corner.
Company executives allayed investor concerns over the driver shortage, telling analysts spending on incentives to get drivers back on the road after the pandemic was largely behind the company.
But a massive drop in the value of its stake in Chinese ridesharing company Didi (DIDI.N) resulted in a net loss of $ 2.4 billion in the third quarter, and Wall Street considered Uber’s forecast for the fourth quarter as disappointing. Shares rebounded in after-hours trading and rose about 1% as Uber informed Wall Street on a call.
The California-based company reported adjusted earnings before interest, taxes, depreciation and amortization, a measure that excludes one-time costs such as stock-based compensation, of $ 8 million for the quarter ended September 30. That compared to a loss on the same basis of $ 625 million a year ago.
Uber was forecasting adjusted earnings of $ 25 million to $ 75 million for the last quarter of 2021. Analysts were expecting an average of $ 114 million, according to data from Refinitiv.
Despite adjusted earnings, Uber’s earnings report was disappointing after little U.S. rival Lyft Inc (LYFT.O) on Tuesday announced its second consecutive quarterly adjusted earnings at $ 67.3 million and said it he expected adjusted EBITDA of between $ 70 million and $ 75 million in the fourth quarter. Read more
Uber and Lyft’s operations have yet to become profitable on a net basis, and the companies are declining to give any hints on when that could happen.
A decline in the value of Uber’s stake in Chinese transport service Didi and stock-based compensation payments resulted in a net loss that more than doubled from a year ago.
Didi, which went public in June, saw its market capitalization drop by several billion dollars after China’s market regulator launched an antitrust investigation.
In Uber’s actual business, total revenue grew 72% to $ 4.8 billion, above an average analyst estimate of $ 4.4 billion, according to IBES data by Refinitiv.
Uber’s delivery business, which includes restaurant food deliveries and store deliveries, has become the backbone of the business during the pandemic. Delivery revenue grew steadily in the third quarter, signaling that passenger growth did not come at the expense of its Uber Eats unit.
The company’s core restaurant delivery business, which accounts for about 96% of gross delivery bookings, was profitable for the first time based on adjusted EBITDA in the third quarter, Uber said.
Consumers were traveling in greater numbers in the third quarter and its driver and courier base had grown by nearly 640,000 since January, Uber said. The company spent more than $ 250 million to attract drivers after the pandemic.
Uber did not provide data on how the number of drivers compared to pre-pandemic levels. Uber chief executive Dara Khosrowshahi said the company is keen to increase its driver base beyond 2019 levels to meet expected demand.
Ride bookings in the quarter remained more than 20% below third quarter 2019 levels, but Uber said ride unit margins were back to pre-pandemic levels.
“Investors want to see a significant recovery in gross bookings for Uber’s ridesharing service, which is a high-margin business relative to UberEats,” said Haris Anwar, analyst at Investing.com.
While Uber has said Halloween weekend has passed 2019, demand for bikers traveling for parties and entertainment is around 80% of pre-pandemic levels, executives said during a call for analyst results.
Travel to US airports, among the most profitable routes in the industry, has increased in recent weeks but lags all other categories of travel, remaining about 33% below pre-pandemic levels .
Reporting by Tina Bellon in Austin, Texas and Nivedita Balu in Bangaluru; Editing by Cynthia Osterman
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