Yuvraj Malik
(Reuters) – Uber reported a surprise first-quarter loss and forecast total bookings in the second quarter would be below Wall Street expectations, sending the ride-hailing and food delivery company’s shares down nearly 9% on Wednesday.
Uber’s (NYSE:) growth could slow after a strong 2023 in which the company dominated the ride-sharing market and delivery business in the U.S. and posted its first full-year profit, the report said.
The drop in share prices, the sharpest one-day drop since October 2022, was expected to wipe more than $10 billion off Uber’s market value if losses persist.
Uber reported a net loss of $654 million, driven by legal fees and provisions and those related to the fair valuation of certain of the company’s investments. Analysts had expected net income of $503.1 million.
Uber also missed market expectations for quarterly gross bookings, a key metric that shows the total dollar value of transactions on the platform.
CFO Prashant Mahendra-Raja attributed the decline to lower ride-sharing demand in Latin America and the impact of some holidays being pushed into the first quarter.
“We already expected a slowdown in average spending in several markets due to slower-than-expected US economic activity in the first quarter and continued consumer pressures. However, this is well above the base case,” said Thomas Monteiro, senior analyst at Investing.com.
On the contrary, a smaller competitor Elevator (NASDAQ:) reported better-than-expected results on Tuesday and forecast a strong second quarter, saying it is seeing an increase in demand for ride-sharing industry-wide.
Lyft, which operates in the United States and parts of Canada, has been trying to take market share from Uber since it hired David Risher as CEO last April.
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In addition to aggressively cutting costs, Risher was able to attract users to Lyft through shorter wait times and competitive rates.
Uber operates in approximately 70 countries and offers services including cargo booking. The company had a 72% share of the U.S. taxi 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 generated from its services, to be in the range of $38.75 billion to $40.25 billion, below estimates of $40.04 billion.
For the quarter ended March 31, gross orders were $37.65 billion, well below expectations of $37.92 billion.
Revenue rose 15% to $10.13 billion, slightly beating estimates of $10.11 billion. On an adjusted basis, Uber lost 32 cents per share, compared with expected profit of 23 cents.