By Yuvraj Malik
(Reuters) – Uber posted a surprise first-quarter loss and forecast gross bookings in the second quarter below Wall Street expectations, sending the shares of the ride-share and food delivery company down 6% before the bell.
The report suggests that Uber’s growth could be slowing after a strong 2023 in which it dominated the U.S. ride-share market and delivery business and posted its first annual profit.
Uber 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.
Uber also missed market expectations for quarterly gross bookings, a key metric that indicates the total dollar value of transaction on the platform.
CFO Prashanth Mahendra-Rajah attributed it 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.
In contrast, smaller rival Lyft posted better-than-expected result and forecast a strong second quarter on Tuesday, saying it saw an industry-wide pickup in ride-share demand.
Lyft, which operates in the United States and parts of Canada, is trying to take market share from Uber since it hired David Risher as CEO last April.
Besides aggressively cutting cost, Risher has managed to add users to Lyft with shorter wait times and competitive fares.
Uber operates in about 70 countries and offers services, including freight booking. It had a 72% share in the U.S. ride-hailing market in the March quarter, up from 68% two years ago, according to YipitData.
Uber said it expects second-quarter gross bookings, or the total dollar value earned from its services, in the range of $38.75 billion to $40.25 billion, below estimates of $40.04 billion.
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.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Arun Koyyur)