By Yuvraj Malik
(Reuters) – Uber reported a surprise loss in the first quarter and forecast total bookings in the second quarter to be below Wall Street expectations, sending shares of the ride-sharing and food delivery company down nearly 9% on Wednesday.
The report suggests that Uber’s growth may slow after a strong 2023 in which it dominated the ride-sharing market and ride-hailing business in the United States and posted its first annual profit.
The stock price drop, its biggest single-day drop since October 2022, was set to wipe more than $10 billion off Uber’s market value if losses continued.
Uber reported a net loss of $654 million, driven by legal fees and provisions and those related to the fair valuation of some of the company’s investments. Analysts were expecting a net profit of $503.1 million.
Uber also beat market expectations for quarterly gross bookings, a key metric that indicates the total dollar value of transactions on the platform.
CFO Prashanth Mahendra Raja attributed this to weak ride-sharing demand in Latin America and the impact of some holidays moving into the first quarter.
“We were already expecting a slowdown in average spending in many markets due to slower-than-expected economic activity in the US in the first quarter and persistent consumer pressures. However, this is well above the baseline scenario,” said Thomas Monteiro, senior analyst at the bank. Investment.com.
In contrast, smaller rival Lyft reported better-than-expected results and forecast a strong second-quarter performance on Tuesday, saying it had seen an industry-wide rebound 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 appointed David Risher as CEO last April.
Besides aggressively cutting costs, Risher has been able to add users to Lyft with shorter wait times and competitive rates.
Uber operates in about 70 countries and offers services, including booking freight. 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 range between $38.75 billion and $40.25 billion, below estimates of $40.04 billion.
In the quarter ended March and August 31, total bookings reached $37.65 billion, missing expectations of $37.92 billion.
Revenue rose 15% to $10.13 billion, narrowly beating estimates of $10.11 billion. On an adjusted basis, Uber lost 32 cents per share, compared to expectations for a profit of 23 cents.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Arun Kuyyur)
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