Uber stock tumbled Wednesday after the ride-share and food delivery company reported a surprise first-quarter loss and a weak outlook moving forward — while shares of e-hail rival Lyft went into overdrive after reporting a notable year-over-year acceleration in its latest earnings.
Uber was down nearly 6%, to around $65 after the opening bell, as the the company also forecast gross bookings — a key metric that indicates the total dollar value of transaction on the platform — in the second quarter below Wall Street estimates.
The earnings report suggests that Uber’s growth could be slowing after a strong 2023 in which it dominated the US ride-share market and delivery business and posted its first annual profit.
The stock price slide, Uber’s steepest single-day decline since October 2022, was set to erase about $10 billion from its market value if losses hold.
Lyft, meanwhile, soared 8%, to around $18, on the heels of the company’s better-than-expected earnings after Tuesday’s closing bell.
The company’s sales for the first three months of 2024 rang in at $1.28 billion, beating analysts’ estimates of $1.16 billion.
The figure represented a hefty 27.59% increase from the $1 billion in sales the company reported in the year-ago period.
Gross bookings were up 21% on a yearly basis, totaling $3.7 billion, as Lyft’s initiative to get more women in the drivers seat helped boost its number of females customers.
“We are executing well and bringing much-needed innovation to the market. That’s why drivers and riders are choosing Lyft more often,” CEO David Risher said during Tuesday’s earning call.
Risher, who stepped into the chief role at Lyft last April, said the female-forward effort increased the number of women drivers by 24% in the first quarter compared to a year ago, The Information earlier reported
He said the company also managed to add users with shorter wait times and competitive fares.
Overall, Lyft’s number of active riders rose 12% year over year, while total rides increased 23%.
Uber, the market leader, reported a net loss of $654 million, driven by legal charges and provisions and those related to fair valuation of certain company investments.
Analysts were expecting a net profit of $503.1 million.
In the quarter ended Mar. 31, gross bookings came in at $37.65 billion, closely missing expectations of $37.92 billion.
Revenue rose 15% to $10.13 billion, narrowly beating the estimate of $10.11 billion.
On an adjusted basis, Uber lost 32 cents per share, compared with expectations of 23 cent profit.
There were 2.6 billion trips completed on the platform during the period, up 21% year over year.
Uber CEO Dara Khosrowshahi told CNBC’s “Squawk Box” on Wednesday that the company’s losses had “nothing to do with the operating business.”
“We did have to mark down those equity stakes that resulted in a loss,” Khosrowshahi said. “We don’t expect that to keep happening going forward.”
The weaker outlook for the second quarter was attributed to softer ride-share demand in Latin America and the impact from certain holidays shifting into the first quarter.
“We were already expecting a deceleration in average spending in several markets due to slower-than-expected economic activity in the US in Q1 and persistent consumer pressures. However, this is way above the base case,” said Thomas Monteiro, senior analyst at Investing.com.
