Uber Earnings Clear Wall Street’s Bar, but Stock Cools After Big Rally

Uber Technologies Inc. faced heightened expectations leading up to its earnings report on Wednesday, and although the ride-hailing giant surpassed Wall Street's projections, its stock experienced a premarket decline.

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For the fourth quarter, Uber reported a revenue increase to $9.9 billion from $8.6 billion, surpassing the FactSet consensus of $9.8 billion. The company also achieved a 22% growth in gross bookings, reaching $37.6 billion, exceeding analysts' expectations of $37.1 billion.

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Chief Financial Officer Prashanth Mahendra-Rajah attributed the success to Uber's platform advantages and strategic investments in new growth opportunities, resulting in record engagement and a surge in gross bookings during the fourth quarter.

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Uber's bottom line also exceeded expectations, as it posted a fourth-quarter net income of $1.4 billion, or 66 cents per share, compared to $595 million, or 29 cents per share, in the same period the previous year. The FactSet consensus had anticipated earnings of 16 cents per share.

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Looking ahead to the first quarter, Uber anticipates gross bookings in the range of $37.0 billion to $38.5 billion, along with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $1.26 billion to $1.34 billion. The FactSet consensus for the first quarter was $37.4 billion in gross bookings and $1.26 billion in adjusted EBITDA.

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While Uber hinted at an upcoming capital-return program, it did not provide specific details during the earnings report. The company indicated that more information would be shared at an investor event scheduled for the following week.

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Despite the positive financial results, Uber's stock, which has doubled in value over the past year, experienced a 1% decline in premarket activity on Wednesday. A Bernstein analyst pointed out that, from a long-term perspective, the stock's outlook seemed favorable, although short-term expectations were elevated.

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Investors are eagerly awaiting further details about Uber's capital-return program, and the upcoming investor event may shed light on the company's plans for returning value to shareholders.

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In conclusion, Uber's fourth-quarter performance exceeded expectations, showcasing robust revenue growth, increased gross bookings, and a substantial beat on the bottom line. However, the market's response in premarket trading indicates that investors may have had even higher expectations, emphasizing the challenges companies face in meeting ever-rising market demands.

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