Uber posts operating profit but forecast lags Lyft, analysts targets

By Tina Bellon and Nivedita Balu

(Reuters) -Uber Technologies Inc on Thursday reported its first profitable quarter on an adjusted basis since launching more than a decade ago with its two largest segments, ridesharing and restaurant delivery, both in the process of breaking through the cap.

But a massive drop in the value of its stake in Chinese rideshare company Didi resulted in a net loss of $ 2.4 billion, and Wall Street viewed Uber’s fourth-quarter forecast as disappointing. Shares fell 1.6%.

The California-based company reported adjusted earnings before interest, taxes, depreciation and amortization, a measure that excludes one-time costs, primarily 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 was forecasting adjusted earnings of $ 25 million to $ 75 million for the last quarter of 2021. Analysts were expecting an average of $ 114 million, according to data from Refinitiv.

Despite adjusted earnings, Uber’s earnings report was disappointing after little U.S. rival Lyft Inc on Tuesday announced its second consecutive quarterly adjusted earnings at $ 67.3 million and said it expected fourth quarter adjusted EBITDA of between $ 70 million and $ 75 million.

Uber and Lyft’s operations have yet to become profitable on a net basis, and the companies are declining to provide any hints on when that could happen.

Consumers were traveling in greater numbers in the third quarter and drivers had returned to its platform, Uber said, suggesting its driver incentive payments were helping.

The company’s growing net loss of $ 2.4 billion is mainly due to the decline in the value of its stake in Chinese transport service Didi and stock-based compensation. Didi, which went public in June, saw its market capitalization drop by billions of dollars after China’s market regulator launched an antitrust investigation https://www.reuters.com/world/china/didi-us- debut-overshadowed-by -China-cybersecurity-probe-2021-07-05.

“There is very little in Uber’s third quarter report that can stop its actions right now, especially after it had to take a massive one-time load on Didi,” said Haris Anwar, analyst at Investing.com.

Uber’s total revenue rose 72% to $ 4.8 billion, above an average analyst estimate of $ 4.4 billion, according to IBES data from Refinitiv.

Revenue from its mobility unit, which includes its amusement ride business, increased 62% to $ 2.2 billion from a year ago. Revenue increased 36% on a quarterly basis and unit margins returned to pre-pandemic levels.

Uber chief executive Dara Khosrowshahi said in a statement that this year’s Halloween weekend has surpassed 2019 levels, suggesting Americans are eager to get out.

Travel to U.S. airports, among the most profitable routes in the industry, has increased in recent weeks and is up 20% from early September, while business travel is up 60%, said Uber.

Uber CFO Nelson Chai said the company’s core restaurant delivery business was profitable for the first time on an adjusted EBITDA basis in the third quarter.

Uber’s monthly base of active drivers and couriers in the United States has increased by nearly 640,000 since January, but the company has not provided data on how the number of drivers compared to levels of before the pandemic.

Uber’s delivery unit, mostly comprised of the company’s Eats business, continued its streak of success, but gross bookings were largely unchanged from the second quarter.

Delivery, which includes restaurant and store deliveries, recorded an adjusted EBITDA loss of $ 12 million overall, bringing the unit close to breakeven.

Delivery has become the backbone of the Uber pandemic. Regular delivery bookings signal that the rebound in shopping has not come at the expense of food delivery, with consumers sticking to service even as the economy reopens.

(Reporting by Tina Bellon in Austin, Texas and Nivedita Balu in Bangaluru; editing by Cynthia Osterman)

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