Uber Technologies shares rose after reporting revenue that beat analysts’ expectations as gains in ridership assuaged investor concerns that rising inflation would damp consumer spending. The shares jumped about 12 per cent in early trading.
Third-quarter sales increased 72 per cent to $8.34 billion (€8.4 billion), the company said on Tuesday in a statement. That exceeded the $8.1 billion analysts had been expecting, according to data compiled by Bloomberg.
Gross bookings, which encompass ride hailing, food delivery and freight, increased 26 per cent to $29.1 billion, slightly below the average estimate. Adjusted earnings before interest, tax, depreciation and amortisation reached $516 million. Analysts, on average, projected $458.7 million.
“Right now, frankly we’re not seeing any signs of consumer weakness,” chief executive Dara Khosrowshahi said in a conference call with analysts on Tuesday. He added that strong ridership was driven by cities reopening, travel booming and a continued shift of consumer spending from retail to services. “October is tracking to be our best month ever for mobility and total company gross bookings,” he said.
Uber reported its ride-hailing driver base at the end of the period on September 30th was “on par with September 2019 levels, and the increased driver engagement continued into October”. The improvement is a sign the company is moving past a protracted shortage of drivers that has also affected rival Lyft, resulting in higher fares and wait times for customers.
Both ride-hailing giants have spent millions to lure drivers back to their respective platforms and to recruit new drivers to meet resurgent rider demand.
Uber’s food-delivery arm, Uber Eats, generated $13.7 billion in gross bookings during the quarter, a decline from the previous period, and missed the $13.9 billion analysts had expected. The unit, which offers delivery across restaurants, groceries and alcohol, has grown to make up about 33 per cent of the company’s total revenue.
Uber reached profitability on an adjusted basis for the first time in its history last summer and, earlier this year, Mr Khosrowshahi pledged to reach $2 billion in free cash flow.
Uber projected adjusted earnings before interest, tax, depreciation and amortisation in the current quarter of $600 million to $630 million, beating estimates of $564.4 million. Gross bookings will be $30 billion to $31 billion in the period ending in December, in line with expectations.
The company recorded a net loss of $1.2 billion, or 61 US cents a share, attributed in part to its equity stake in Didi Global. – Bloomberg
