Uber Technologies Inc. shares rode higher in Tuesday trading as the ride-hailing company’s profit story continued to resonate with investors.
The company reported $221 million in net income, or 10 cents in earnings per share. In the same period a year earlier, it recorded a net loss of $1.2 billion, or 61 cents a share.
The FactSet consensus was for 7 cents a share in earnings.
Uber
UBER,
+3.70%
also recorded $1.1 million in adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, while analysts were looking for $1.0 billion.
Revenue increased to $9.3 billion from $8.3 billion, while the FactSet consensus was for $9.5 billion.
Chief Financial Officer Nelson Chai said in prepared remarks that the company saw a $521 million hit to revenue stemming from “certain business-model changes” that required the company to reclassify some promotions as contra-revenue items, rather than as sales and marketing expenses, although the changes didn’t impact profits.
Gross bookings came in at $35.3 billion, while analysts had been expecting $34.6 billion.
Shares were up more than 3% late in Tuesday’s session.
“Our efforts around new use cases are already driving incremental user acquisition, consumer engagement and meaningful scale,” Chief Executive Dara Khosrowshahi said on the earnings call. “We also see tailwinds from the continued shift of consumer spending from retail to services.”
For the fourth quarter, Uber models $36.5 billion to $37.5 billion in gross bookings and $1.18 billion to $1.24 billion in adjusted Ebitda. Analysts had been looking for $36.5 billion and $1.16 billion, respectively.
“Published prepared remarks suggest Rides & Delivery continue to perform strongly through the month of October, in contrast to travel peer commentary on macro weakness heading into [the fourth quarter],” Wells Fargo analyst Ken Gawrelski wrote in a note to clients.
Uber previously announced that Chai plans to leave his post. “As our cash flow continues to ramp, and with a new CFO coming on board, next quarter we expect to provide an update on returning capital to shareholders,” Chai said in his prepared remarks Tuesday.
“The business is generally accelerating, the company beat & raised as has become customary, new modes of transport are showing substantial traction & growth, new verticals’ losses are moderating and the company’s now increasingly profitable model sets the company up for index inclusion and a capital-return story” in 2024, RBC Capital Markets analyst Brad Erickson wrote.
Uber shares have climbed 102% so far this year, compared with a 14% increase for the S&P 500 index
SPX
over the same period.
See more: Uber’s outgoing CFO dumps $4.5 million in stock (from August 2023)
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