Company executives allayed investor concerns about a
shortage of drivers, telling analysts that spending on incentives to entice
drivers back on the road after the pandemic was largely behind the company.
But a massive drop in the value of its stake in Chinese
ridehailing company Didi drove a $2.4 billion net loss in the third quarter,
and Wall Street viewed Uber's fourth-quarter forecast as disappointing. Shares
bounced in after-hours trade and were up about 1 percent as Uber briefed Wall
Street in a call.
The California-based company reported adjusted earnings
before interest, taxes, depreciation and amortization, a measure that excludes
one-time costs such as stock-based compensation, of $8 million for the quarter
ended September 30. That compared to a loss on the same basis of $625 million a
year ago.
Uber forecast an adjusted profit of $25 million to $75
million for the last quarter of 2021. Analysts on average expected $114 million
according to Refinitiv data.
Despite the adjusted profit, Uber's earnings report came as
a disappointment after smaller US rival Lyft on Tuesday reported its second
consecutive quarterly adjusted profit at $67.3 million and said it expected
adjusted EBITDA of between $70 million and $75 million in the fourth quarter.
Uber's and Lyft's operations have yet to become profitable
on a net basis, and the companies decline to provide guidance of when that
might happen.
A drop in value of Uber's holding in Chinese ride service
Didi and stock-based compensation payments resulted in a net loss that more
than doubled from last year.
Didi, which went public in June, saw its market
capitalization drop by billions of dollars after China's market regulator
launched an anti-trust probe.
In Uber's real-world business, total revenue grew 72 percent
to $4.8 billion, above an average analyst estimate of $4.4 billion, according
to IBES data from Refinitiv.
Uber's delivery business, which includes restaurant food and
store deliveries, emerged as the company's backbone during the pandemic.
Delivery revenue saw a steady increase in the third quarter, signaling that
growth in riders did not come at the expense of its Uber Eats unit.
The company's core restaurant delivery business, which makes
up some 96 percent of delivery gross bookings, was profitable for the first
time on an adjusted EBITDA basis in the third quarter, Uber said.
Consumers were traveling in greater numbers in the third
quarter and its driver and courier base had grown by nearly 640,000 people
since January, Uber said. The company spent more than $250 million to lure
drivers back after the pandemic.
Uber did not provide data on how driver numbers compared to
pre-pandemic levels. Uber Chief Executive Dara Khosrowshahi said the company
wanted to grow its driver base beyond 2019 levels to meet expected demand.
Ride bookings in the quarter remained more than 20 percent
below third-quarter levels in 2019, but Uber said ride unit margins had
returned to pre-pandemic levels.
"Investors want to see a meaningful recovery in the
gross bookings for Uber's ride-hailing service which is a high-margin business
compared to UberEats," said Haris Anwar, an analyst at Investing.com.
While Uber said Halloween weekend surpassed 2019, demand
from riders traveling for parties and fun is at about 80 percent of
pre-pandemic levels, executives said during an analyst earnings call.
U.S. airport trips, among the most profitable routes in the industry,
increased in recent weeks, but lagged all other ride categories, remaining
around 33 percent below pre-pandemic levels. © Reuters
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