Uber surges 11% after mixed guidance and outperforms Wall Street

The company expects its gross bookings to hover in the range of $40bn and $42bn in the September quarter

Uber has partnered with China's BYD to bring 100,000 new electric vehicles onto the Uber platform across various markets. Bloomberg

Ride-hailing company Uber jumped almost 11 per cent on Tuesday, outperforming major tech stocks and Wall Street after the company issued a mixed guidance for the September quarter.

The company predicted adjusted earnings for the July-September period to be between $1.58 billion and $1.68 billion, up almost 78 per cent annually. The mid-range estimate of $1.63 billion slightly exceeded analysts' $1.62 billion estimate.

Uber also forecast its gross bookings, or the total dollar value earned from its services, to increase more than 18 per cent in the range of $40.25 billion and $41.75 billion in the continuing quarter. However, the mid-range estimate of $41 billion fell short of the $41.18 billion average estimate, according to StreetAccount.

The company mentioned that fluctuations in currency exchange rates could negatively impact its yearly earnings, reducing overall growth by 4 percentage points due to unfavourable exchange rate changes in the coming months.

Bucking the Wall Street trend

Following the guidance, Uber’s shares surged 8.41 per cent to trade at $63.40 a share in premarket trading on Tuesday. They rose 10.93 per cent to trade at $64.87 a share at market close on Tuesday giving the company a market cap of more than $140.21 billion.

Uber shares have risen, bucking the trend on Wall Street, which experienced its worst day since 2022 on Monday due to mounting fears of a US recession.

Wall Street showed an uneven performance on Tuesday. Shares of major tech firms were mixed, with Apple down 0.97 per cent, Intel down 0.61 per cent, Alphabet down 0.06 per cent while Tesla and Meta were up 0.88 per cent and 3.86 per cent, respectively, at market close. The Nasdaq and S&P 500 Index were up more than 1 per cent.

The company’s increasing market share and electrification plans have boosted investors’ confidence.

In July, Uber announced a multiyear partnership with China's BYD, a maker of hybrid and battery electric cars, to introduce 100,000 new electric vehicles on to the Uber platform across various markets. It also plans to collaborate on future BYD autonomous-capable vehicles to be deployed on the Uber platform.

Earnings gush

Uber reported revenue of almost $10.7 billion in the second quarter, almost 16 per cent up on an annual basis, exceeding analysts’ expectation of $10.5 billion. Its earnings per share stood at 47 cents above the expected 31 cents.

The company reported a net profit of more than $1 billion in the second quarter, up from a net loss of $654 million in the March quarter. However, it was up 158 per cent on a yearly basis.

Adjusted income surged 71 per cent to nearly $1.6 billion in the last quarter.

The company’s operating income in the last quarter was $796 million, up from $326 million in the same period last year.

“The Uber consumer has never been stronger … more people are using the platform, and more frequently, than ever before,” Dara Khosrowshahi, company’s chief executive, said.

It was the company’s sixth consecutive quarter of trip growth above 20 per cent. Meanwhile, drivers and couriers earned a new all-time high of $17.9 billion over the quarter.

The company’s gross bookings increased 19 per cent year on year to almost $40 billion in the second quarter.

Delivery gross bookings rose 16 per cent to more than $18.1 billion and mobility bookings increased 23 per cent to over $20.5 billion.

Freight unit bookings – which include transport, logistics, supply chain and storage solutions – remained steady at nearly $1.3 billion.

The company also crossed 2.8 billion trips in the last quarter, averaging nearly 1.25 million trips an hour, or almost 30 million trips a day, with the company defining trips as the number of completed consumer mobility rides and delivery orders in a given period. Trips during the quarter grew 21 per cent year-on-year.

The monthly active platform consumers reached 156 million in the previous quarter. It grew 14 per cent on a yearly basis, driven by continued improvement in consumer activity for both delivery and mobility, Uber said.

Uber’s chief financial officer Prashanth Mahendra-Rajah said the company’s strong revenue and cost management ensured that Uber is growing steadily and generating significant cash flow.

He said the company has also started buying back shares this quarter to boost long-term returns for its shareholders.

The company’s share repurchases stood at $325 million of its common stock in the last quarter.