Uber forecasts operating profit above estimates as rideshare recovers By Reuters

(Reuters) -Uber Technologies Inc on Tuesday forecast fourth-quarter operating profit above Wall Street estimates, betting on rising demand for its rides as customers resume spending more on travel and tight control on costs.

With cities reopening and travel booming, consumers are shifting their budgets to services, Chief Executive Dara Khosrowshahi said, compared to the two years of COVID-led lockdowns when they had limited spending to basic needs.

“We’ve seen these trends continue into the fourth quarter, with October tracking to be our best month ever for both mobility and total company gross bookings,” he said as revenue in its rideshare segment rose 73% in the third quarter.

Uber (NYSE:) shares surged 9% before the opening bell, lifting peers Lyft Inc (NASDAQ:) and DoorDash Inc.

The ridehailing company, which had faced driver shortages during its recovery from pandemic losses, said active drivers are back to September 2019 levels as decades-high inflation push many to look for sources of additional income.

Uber, however, is also aiming to scale back hiring and reduce expenses to expand profitability amid macroeconomic uncertainties, with Khosrowshahi stressing the importance of “not taking anything for granted”.

The company forecast fourth-quarter adjusted EBITDA, a profitability metric keenly watched by investors, between $600 million and $630 million. Analysts were expecting $569.39 million, according to Refinitiv data.

Gross bookings, or the total dollar value from its services, is expected to grow between 23% and 27%, compared with a 26% rise in the quarter ended Sept. 30.

Revenue rose 72% to $8.34 billion in the third quarter, beating the analysts’ average estimate of $8.12 billion.

Adjusted EBITDA, a measure that excludes one-time costs such as stock-based compensation, came in at $516 million, above the estimate of $461.5 million.

The food delivery business grew 24% compared to 37% in the prior quarter, indicating that consumers are holding back on ordering in food as cost of living rises.

Net loss attributable to the company was $1.21 billion, or 61 cents per share, compared to a loss of $2.42 billion, or $1.28 per share, a year earlier.