Uber Operating Profit Hit by Legal Fees, Shares Fall

Reuters
Nov 04

Nov 4 (Reuters) - Uber missed operating profit expectations on Tuesday and issued a downbeat earnings forecast for the key holiday quarter, overshadowing strong demand for its rides and food deliveries driven by growing adoption of its membership program.

Uber CEO expected that Robotaxis would not be profitable for a few years.

The company blamed the weak profit on undisclosed legal and regulatory matters. Its shares fell nearly 9% in premarket trade, following a more than 60% rise in the stock so far this year.

CEO Dara Khosrowshahi said the Uber One program was encouraging customers to book more food and grocery deliveries as the company surpassed quarterly revenue and gross bookings expectations.

The delivery segment posted a 29% sales rise in the July-September quarter, outpacing the 20% increase in mobility revenue and flat growth in the freight division.

Consumers who use more than one of Uber's services have 35% higher retention and spend three times more than others, Khosrowshahi said. Only about 20% of active users in markets with rides and delivery use them together, though top-performing countries already surpass that level.

Uber's gross bookings growth accelerates on strong cross-platform usage

Uber reported operating income of $1.11 billion, missing estimates of $1.61 billion, according to Visible Alpha data. Its forecast for current-quarter adjusted core profit of between $2.41 billion and $2.51 billion was marginally below expectations of $2.48 billion, according to data compiled by LSEG.

The company forecast gross bookings - or the total dollar value of rides, deliveries and other services - of between $52.25 billion and $53.75 billion for the fourth quarter. Analysts expect $52 billion, according to data compiled by LSEG.

Uber will replace adjusted EBITDA with adjusted profit forecasts starting from its guidance for the first quarter of next year, adopting a practice typical of more mature firms.

Gross bookings in the third quarter ended September 30 were $49.74 billion, compared with estimates of $48.73 billion. Revenue rose 20% to $13.47 billion, beating estimates of $13.28 billion.

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