Stocks Rise After Uber Beats Estimates

The company announced earnings for the fourth quarter that exceeded analysts' expectations on Wednesday. A gain of around 2.5% was recorded in the shares.

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The company's performance was as follows:

• Earnings per share: 29 cents compared with analysts' expectations of a loss of 18 cents.
• Revenue: $8.6 billion, compared to the $8.49 billion expected by analysts.

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During the quarter, revenue increased by 49% over the same period last year. In its earnings report for the second quarter, Uber stated that its net income was $595 million, of which $756 million was a net benefit due to unrealized gains on equity investments.

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As Uber's CEO Dara Khosrowshahi put it in a prepared statement, the company ended 2022 with its "strongest quarter ever," culminating in its "strongest year." As a result of the pandemic, active drivers reached an all-time high during the quarter, he said, and the pandemic's impact is well and truly behind us. Averaging around 1 million trips per hour, the company also reached a new milestone by completing 2 billion trips in a single quarter.

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“Most importantly, we managed to achieve these results while maintaining or improving our competitive position across our key markets at the same time,” he said in the statement.

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StreetAccount reports that the company reported an adjusted EBITDA of $665 million, which is higher than the $620 million expected by analysts, according to Trade Algo. In terms of gross bookings, $30.7 billion was recorded for the quarter, an increase of 19% compared to last year.

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There is an expectation that Uber will post a growth of between 20% and 24% in gross bookings year over year in the first quarter of 2023 on a constant currency basis, as well as an adjusted EBITDA of $660 million to $700 million.

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The following is an overview of Uber's biggest business segments based on their performance in the third quarter:

• Mobility (gross bookings): $14.9 billion, compared with analysts' expectations of 14.8 billion

• Delivery (gross bookings): $14.3 billion, compared to the $14.3 billion expected by analysts.

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During the Covid pandemic, Uber relied heavily on its Eats delivery service to drive growth, but as Riders began to take more trips, Uber's mobility segment overtook Eats revenue in its first, second, and third quarters in 2022. It was also the case during the fourth quarter as the company's mobility segment reported a revenue of $4.1 billion, while the company's delivery segment reported a revenue of $2.9 billion. The freight business of Uber posted revenue of $1.5 billion for the quarter ending June 30.

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A total of 131 million consumers were active on the platform each month in the fourth quarter of the year, up 11% from last year. The platform completed 2.1 billion trips during the period under review, which was an increase of 19% compared to the previous year.

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In an interview with Trade Algo on Wednesday, Khosrowshahi said he did not see any signs of a decline in consumer spending at Uber. Following the pandemic, he said he believed the company might be able to benefit from a shift in spending from retail to services.

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"We have looked everywhere," he said. Currently, we don't see any signs of consumer weakness.”

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Khosrowshahi, however, said that about 70% of drivers are stating that inflation is a factor in their decision to join Uber's platform and that this is a factor influencing their decision.

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“We may be able to benefit from that trend. We'll have to wait and see where it leads,” he said with a smile.

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Investors will be able to listen to Uber's quarterly conference call at 8:00 a.m. ET on Wednesday.