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

February 7, 2024
minute read

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.

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.

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.

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.

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.

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.

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.

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.

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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