Uber Meets Wall Street Expectations, Stock Cools Post-Rally

Uber Technologies Inc. encountered elevated expectations preceding its earnings report on Wednesday, and despite surpassing Wall Street’s projections, the ride-hailing behemoth witnessed a premarket decline in its stock.

For the fourth quarter, Uber disclosed a rise in revenue to $9.9 billion from $8.6 billion, outstripping the FactSet consensus of $9.8 billion.

Additionally, the company attained a 22% expansion in gross bookings, totaling $37.6 billion, exceeding analysts’ forecasts of $37.1 billion.

Chief Financial Officer Prashanth Mahendra-Rajah attributed Uber’s success to its platform advantages and strategic investments in new growth opportunities, resulting in record engagement and a surge in gross bookings during the fourth quarter.

Uber’s bottom line also exceeded expectations, with a fourth-quarter net income of $1.4 billion, or 66 cents per share, compared to $595 million, or 29 cents per share, in the same period the previous year.

The FactSet consensus had anticipated earnings of 16 cents per share.

Uber 2024 shares
Uber Technologies Inc. (Credits: Google Finance)

Looking forward to the first quarter, Uber anticipates gross bookings in the range of $37.0 billion to $38.5 billion, along with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $1.26 billion to $1.34 billion.

The FactSet consensus for the first quarter was $37.4 billion in gross bookings and $1.26 billion in adjusted EBITDA.

Although Uber hinted at an upcoming capital-return program, it refrained from divulging specific details during the earnings report. The company indicated that more information would be disclosed at an investor event scheduled for the following week.

Despite the positive financial results, Uber’s stock, which has doubled in value over the past year, experienced a 1% decline in premarket activity on Wednesday.

Uber
Investors await Uber’s capital-return program details (Credits: Getty Images)

A Bernstein analyst noted that while the stock’s long-term outlook appeared favorable, short-term expectations were elevated.

Investors eagerly anticipate further details about Uber’s capital-return program, and the upcoming investor event may illuminate the company’s plans for returning value to shareholders.

Uber’s fourth-quarter performance surpassed expectations, demonstrating strong revenue growth, higher gross bookings, and a significant bottom-line beat.

Nevertheless, the premarket trading reaction suggests that investors might have held even loftier expectations, underscoring the difficulties companies encounter in meeting continuously escalating market expectations.

Michael Manua
Michael Manua
Michael, a seasoned market news expert with 29 years of experience, offers unparalleled insights into financial markets. At 61, he has a track record of providing accurate, impactful analyses, making him a trusted voice in financial journalism.
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