Ride-hailing and food delivery company Uber Technologies (UBER) announced on Tuesday its projections of fourth-quarter (Q4) gross bookings and adjusted core profit surpassing market expectations. The company is banking on the holiday season to drive increased demand for its services. This announcement comes hot on the heels of their third-quarter (Q3) report released just last week, where core profit exceeded expectations, but revenue fell short of projections. Following the announcement the stock of Uber Technologies took a tumble.
At the time of this publication, Uber Technologies Inc stock (UBER) has witnessed a decline.
Uber Technologies Inc
Current Price: $47.16
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On Tuesday, CEO Dara Khosrowshahi indicated a positive outlook for the upcoming quarter, stating, “Consumer demand on our platform remains healthy as we enter the busiest period of the year. This trend continued into the fourth quarter as we achieved all-time highs in October for overall trips and gross bookings, driven by strength across both mobility and delivery.”
Uber’s optimism for the next quarter is underpinned by a return-to-office push by some companies, coupled with resilient travel demand. These factors have played a pivotal role in shoring up profits for the company after a challenging 2022. The Q4 projections of Uber predict adjusted core profit ranging from $1.18 billion to $1.24 billion, slightly surpassing analysts’ anticipated figure of $1.15 billion, as reported by the London Stock Exchange Group (LSEG). Simultaneously, gross bookings, representing the total value generated from their services, are projected to range between $36.5 billion and $37.5 billion, surpassing market analysts’ projections of $36.31 billion.
The company’s Q3 report disclosed an 11% increase in revenue, marking its slowest growth since the first quarter of 2021, reaching $9.29 billion. This figure fell short of the average analyst estimate of $9.52 billion. This growth rate was notably lower than the over 14% surge witnessed in the preceding quarter, as well as the remarkable 70% upswing observed a year prior. Uber clarified that specific accounting adjustments related to revenue recognition had an 8-percentage-point impact on growth in its combined mobility and delivery segments.
While revenue from its core ride-share services met expectations, delivery revenue growth lagged behind estimates. Uber’s optimistic forecast for the fourth quarter serves as a welcome development following the array of challenges faced throughout the year. Investors demonstrated their confidence in the company’s potential, resulting in a 1% uptick in pre-market trading on Tuesday.
With the holiday season drawing nearer, Uber Technologies and its extensive customer base are gearing up to capitalize on these final weeks. The technology company is poised to leverage this lucrative season to its fullest potential.
Source: Reuters
