Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Uber Misses Q1 Expectations, Issues Weak Forecast for Q2

Published 2024-05-08, 09:41 a/m
© Reuters.  Uber Misses Q1 Expectations, Issues Weak Forecast for Q2
UBER
-
LYFT
-

Quiver Quantitative - Uber Technologies (NYSE:UBER) (UBER) posted a surprising first-quarter net loss and issued a weaker-than-expected forecast for its second-quarter gross bookings, causing its shares to tumble by 6% before the market opened. Despite dominating the U.S. ride-share market and food delivery business in 2023, posting its first annual profit that year, Uber reported a net loss of $654 million for the quarter, primarily due to legal charges and provisions and the fair valuation of certain company investments. Analysts had expected a net profit of $503.1 million. Additionally, Uber missed Wall Street expectations for quarterly gross bookings, a critical metric that reflects the total value of transactions on the platform.

Prashanth Mahendra-Rajah, Uber's CFO, attributed the gross booking miss to softer ride-share demand in Latin America and the impact of shifting holidays. "We were already expecting a deceleration in average spending in several markets due to slower-than-expected economic activity in the U.S. in Q1 and persistent consumer pressures. However, this is way above the base case," said Thomas Monteiro, a senior analyst at Investing.com. Uber forecasted its second-quarter gross bookings between $38.75 billion and $40.25 billion, falling short of analysts' expectations of $40.04 billion.

Market Overview: -Uber reports a surprise net loss in Q1 and forecasts lower-than-expected gross bookings for Q2, causing a stock price drop.

Key Points: -The loss comes despite a strong 2023 with U.S. market dominance and first-year profitability. -Legal fees and softer demand in Latin America contribute to the negative performance. -Uber's larger market share is overshadowed by missed estimates and a cautious Q2 outlook.

Looking Ahead: -Concerns rise about Uber's growth trajectory after exceeding expectations in 2023. -Rival Lyft (LYFT) shines in contrast with positive results and a bullish Q2 forecast. -Uber needs to address potential economic slowdown and user engagement to regain investor confidence.

In contrast, smaller rival posted better-than-expected results and predicted a strong second quarter, citing an industry-wide uptick in ride-share demand. Lyft, which primarily operates in the U.S. and Canada, has been gaining market share from Uber since hiring David Risher as CEO in April. By cutting costs aggressively, Risher has shortened wait times and offered competitive fares, boosting Lyft's user base. Uber, operating in about 70 countries and providing services including freight booking, had a 72% share of the U.S. ride-hailing market in the March quarter, up from 68% two years ago.

Uber's first-quarter gross bookings came in at $37.65 billion, narrowly missing expectations of $37.92 billion. While revenue rose 15% to $10.13 billion, slightly surpassing the estimate of $10.11 billion, Uber lost 32 cents per share on an adjusted basis, falling far short of expectations for a 23-cent profit.

This article was originally published on Quiver Quantitative

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.