Feb 10 (Reuters) - Lyft forecast first-quarter adjusted core profit below expectations on Tuesday, hit by severe U.S. winter weather, seasonal cost pressures, and posted a surprise operating loss for 2025, sending its shares down 17% in after-hours trading.

The forecast marks a setback for the ride-hailing provider's comeback, fueled by a year of improving bookings growth, higher margins and expansion into new regions, and also overshadows a $1 billion share repurchase program.

The weaker adjusted profit outlook reflects the impact of Winter Storm Fern, which disrupted travel across large parts of the U.S., particularly the East Coast, while seasonal cost pressures also weighed on the projection.

Lyft reported an operating loss of $188.4 million in 2025, compared with analysts' expectations for a profit of $33.3 million, according to Visible Alpha data.

The company expects adjusted core profit of $120 million to $140 million for the first quarter, below estimates of $139.4 million.

"Uber, Lyft's main competitor is growing earnings much faster than Lyft. Uber's EPS growth is 20% while Lyft's is only 13.7%," said Andrew Rocco, stock strategist at Zacks Investment Research.

"Additionally, ride insurance premiums are rising due to California's driver unionization laws, squeezing Lyft's margins."

Lyft forecast gross bookings of $4.86 billion to $5 billion, with the midpoint largely in line with expectations.

RIDING ON STRONG PARTNERSHIPS

Still, the fourth quarter was the company's most profitable on record, supported by stronger rider engagement and a growing mix of higher-value ride modes.

Revenue in the December quarter totaled $1.59 billion, after a $168 million hit from legal, tax and regulatory reserve changes and settlements.

Lyft generated $1.12 billion in free cash flow in 2025, above estimates of $993.4 million, and reported adjusted core earnings of $154.1 million for the fourth quarter, topping expectations of $147.1 million, according to LSEG.

Growth was driven by expansion into Europe, premium and larger vehicle offerings, as well as partnerships.

About a quarter of Lyft's rides in the fourth quarter were linked to a partnership, including strong momentum from its tie-up with DoorDash.