Uber Technologies Inc reported its first profitable quarter on an adjusted basis since it launched more than a decade ago with its two most important segments, ride-hailing and restaurant delivery, both turning the corner.
Company executives allayed investor concerns about a shortage of drivers, telling analysts that spending on incentives to entice 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 ride hailing company Didi drove a $2.4 billion net loss in the third quarter, and Wall Street viewed Uber's fourth-quarter forecast as disappointing. Shares bounced in after-hours trade and were up about 1% as Uber briefed Wall Street in 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 Sept. 30. That compared to a loss on the same basis of $625 million a year ago.
Uber forecast an adjusted profit of $25 million to $75 million for the last quarter of 2021. Analysts on average expected $114 million, according to Refinitiv data.
Despite the adjusted profit, Uber's earnings report came as a disappointment after smaller U.S. rival Lyft Inc reported its second consecutive quarterly adjusted profit at $67.3 million and said it 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 decline to provide guidance of when that might happen.
A drop in value of Uber's holding in Chinese ride service Didi and stock-based compensation payments resulted in a net loss that more than doubled from last year.
In Uber's real-world business, total revenue grew 72% to $4.8 billion, above an average analyst estimate of $4.4 billion, according to IBES data from Refinitiv.
The company's core restaurant delivery business, which makes up some 96% of delivery gross bookings, was profitable for the first time on an adjusted EBITDA basis 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 people since January, Uber said. The company spent more than $250 million to lure drivers back after the pandemic.
U.S. airport trips, among the most profitable routes in the industry, increased in recent weeks, but lagged all other ride categories, remaining around 33% below pre-pandemic levels.
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