By Yuvraj Malik
(Reuters) -Uber posted a surprise first-quarter loss and forecast second-quarter gross bookings below Wall Street expectations, sending shares of the ride-hailing and food delivery company down nearly 9% on Wednesday.
The report suggests Uber’s growth could slow after a strong 2023 in which the company dominated the U.S. ride-hailing and delivery business and posted its first annual profit.
The share price drop, its biggest one-day drop since October 2022, is expected to wipe more than $10 billion from Uber’s market value if losses continue.
Uber reported a net loss of $654 million, due to legal fees and provisions and those related to the fair valuation of certain company investments. Analysts expected net income of $503.1 million.
Uber also fell short of market expectations for quarterly gross bookings, a key metric that indicates the total dollar value of transactions on the platform.
Chief Financial Officer Prashanth Mahendra-Rajah attributed it to weaker demand for ridesharing in Latin America and the impact of some postponed public holidays in the first quarter.
“We already expected a deceleration in average spending in several markets due to slower than expected economic activity in the United States in the first quarter and continued pressures on consumers. However, this figure is well above the scenario of basis,” said Thomas Monteiro, senior analyst at Investir.com.
In contrast, smaller rival Lyft reported better-than-expected results and forecast a strong second quarter on Tuesday, saying it has seen an industry-wide recovery in ride-sharing demand.
Lyft, which operates in the United States and parts of Canada, has been trying to take market share from Uber since it hired David Risher as CEO last April.
In addition to significantly reducing costs, Risher was able to add users to Lyft with shorter wait times and competitive rates.
Uber operates in around 70 countries and offers services including freight booking. It had a 72% share of the U.S. ride-hailing market in the March quarter, up from 68% two years ago, according to YipitData.
Uber said it expects second-quarter gross bookings, or the total dollar value earned from its services, to be between $38.75 billion and $40.25 billion, below estimates for $40.04 billion.
In the quarter ended March 31, gross bookings were $37.65 billion, well short of expectations of $37.92 billion.
Revenue rose 15% to $10.13 billion, narrowly beating the estimate of $10.11 billion. On an adjusted basis, Uber lost 32 cents per share, compared to an expected profit of 23 cents.
(Reporting by Yuvraj Malik in Bangalore; Editing by Arun Koyyur)
News Source : finance.yahoo.com
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