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Uber's Stock Falls After Earnings, but It Logs a Profit Beat

November 7, 2023
minute read

Uber Technologies Inc. witnessed a fluctuating premarket performance on Tuesday after the ride-hailing giant released its latest earnings report, which displayed a mixed bag of financial results.

For the reported period, Uber reported a net income of $221 million, translating to earnings of 10 cents per share. This marked a significant turnaround from the same period in the prior year when the company incurred a net loss of $1.2 billion, equivalent to 61 cents per share.

However, the FactSet consensus had anticipated earnings of 7 cents per share, slightly higher than the actual figure.

Uber's revenue for the period reached $9.3 billion, up from $8.3 billion in the corresponding period a year ago. Yet, this fell slightly short of the FactSet consensus of $9.5 billion.

During the earnings call, Uber's Chief Financial Officer, Nelson Chai, explained that the company experienced a $521 million revenue impact due to "certain business-model changes." These changes led Uber to reclassify some promotions as contra-revenue items rather than categorizing them as sales and marketing expenses. It's important to note that these modifications did not have any adverse effects on the company's profitability.

Gross bookings for Uber during this period totaled $35.3 billion, surpassing analysts' expectations, which had projected $34.6 billion.

In his remarks on the earnings call, Chief Executive Dara Khosrowshahi highlighted the positive impact of Uber's initiatives in exploring new use cases. These efforts have not only contributed to acquiring new users but have also enhanced consumer engagement and fostered meaningful scale for the company. Khosrowshahi also noted that Uber was benefiting from the ongoing trend of consumers shifting their spending from retail to services.

Looking ahead to the fourth quarter, Uber has set its expectations at gross bookings ranging from $36.5 billion to $37.5 billion, along with adjusted earnings before interest, taxes, depreciation, and amortization in the range of $1.18 billion to $1.24 billion. This guidance exceeded the estimates of analysts who had predicted $36.5 billion in gross bookings and $1.16 billion in adjusted earnings.

Wells Fargo analyst Ken Gawrelski acknowledged the company's strong performance in Rides & Delivery, as suggested by the prepared remarks. This strength appeared to contrast with the performance of other travel-focused companies that had been reporting macroeconomic weakness leading into the fourth quarter.

Additionally, Uber had previously disclosed that its CFO, Nelson Chai, is planning to step down from his role. Chai expressed that with the company's growing cash flow and the arrival of a new CFO, Uber expects to provide an update in the next quarter regarding plans to return capital to its shareholders.

For the year as a whole, Uber's stock price has surged by 95%, reflecting investors' optimism and confidence in the company's growth and profitability.

Valentyna Semerenko
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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