Uber shares fall as second quarter forecasts disappoint

By Yuvraj Malik

(Reuters) -Uber forecast second-quarter gross bookings below expectations after missing the target for the first three months on Wednesday, sending its shares down nearly 7% before the bell.

Weakness in a key metric that shows the total value of revenue generated on the Uber platform indicates weakness in demand for the company’s ride-hailing and food delivery services.

In contrast, smaller rival Lyft reported better-than-expected results on Tuesday and forecast a strong second quarter, saying it has seen an industry-wide recovery in ride-sharing demand.

Lyft and Uber have been racing to increase their presence in the ride-sharing market in the United States and Canada, especially since Lyft hired David Risher as CEO last April.

In addition to significantly reducing costs, Risher was able to add users to Lyft with shorter wait times and competitive costs.

Uber said it expects second-quarter adjusted core earnings, a key measure of profitability, of between $1.45 billion and $1.53 billion, with a midpoint of $1.49 billion above expectations. of the market of $1.47 billion, according to LSEG data.

It expects gross bookings, or the total dollar value earned from its services, to be between $38.75 billion and $40.25 billion, lower than estimates of $40.04 billion.

Uber’s first-quarter performance was weighed down by weakness in its food delivery unit, Uber Eats. However, its efforts in terms of profitability are paying off since the former’s basic profit and its forecasts have exceeded Wall Street’s expectations.

Revenue rose 15% to $10.13 billion in the quarter ended March 31, narrowly beating the estimate of $10.11 billion.

Mobility revenue rose more than expected at 30%, while sales at the food delivery unit grew below expectations at 4%.

Gross bookings came in at $37.65 billion, below expectations of $37.92 billion.

Khosrowshahi said growth in the ride-sharing sector was driven by increased commuting to airports and offices, while the delivery sector benefited from new users and higher frequency of orders.

Uber reported first-quarter adjusted core profit of $1.38 billion, up 82% from a year ago and above expectations of $1.32 billion.

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