Uber expects strong core profit as ride share, food delivery demand accelerates

(Reuters) -Uber Technologies forecast quarterly core profit and gross bookings above estimates and reported market-beating results for the holiday quarter on Wednesday, fueled by higher demand in its ride sharing and food delivery businesses.

Uber, which posted its first full-year profit on net basis, is expanding initiatives like memberships, corporate travel and advertising. Coupled with a pickup in travel, this is helping the company improve user retention.

After a drop during the COVID years, travel demand picked up last year as people stepped out more and many companies called their employees to work from offices.

Uber had said in September it was considering buybacks and dividend but did not announce a plan in its earnings statement. Shares of the company fell 3% in premarket trading.

“Uber’s platform advantages and disciplined investment in new growth opportunities resulted in record engagement and accelerating Gross Bookings in Q4,” Chief Financial Officer Prashanth Mahendra-Rajah said.

The company expects adjusted earnings before interest, taxes, depreciation, and amortization of $1.26 billion to $1.34 billion in the quarter ending March, compared with expectations of $1.26 billion, according to LSEG data.

Uber’s gross bookings forecast of $37 billion to $38.5 billion came in higher than expectations of $37.33 billion.

The outlook follows strong results in the seasonally strong October-December period. Revenue increased 15% to $9.9 billion and gross bookings rose 22% to $37.6 billion in the fourth quarter, exceeding Wall Street targets.

Its net profit nearly tripled to $1.43 billion, thanks to a $1 billion net pre-tax benefit from re-evaluation of the company’s equity investments.

Uber said revenue from its core ride-share business grew 34%, driven in part from “outsized trip growth” in Latin America and Asia Pacific markets.

Delivery business revenue grew 6%, while gross bookings growth for the segment was the highest in two years.

“An increasing percentage of our Delivery Gross Bookings growth is coming from trip and audience growth this year versus pricing last year,” Chief Executive Officer Dara Khosrowshahi said.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Arun Koyyur)

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