Uber forecasts operating profit for fourth quarter

Uber Technologies Inc on Tuesday forecast a fourth-quarter operating profit above Wall Street estimates, betting on increased demand for its trips as customers return to spend more on transfers and on its strict control of costs.

With cities reopening and travel booming, consumers are shifting their budgets to services, Chief Executive Dara Khosrowshahi said, compared with two years of Covid lockdowns, when they had limited spending to necessities basic.

“We’ve seen these trends continue into the fourth quarter, with October being our best month ever for both mobility and total company gross bookings,” it said, as revenue in its ride-sharing segment rose by 73% in the third quarter.

Shares of Uber were up 9% before the session opened, lifting peers Lyft Inc and DoorDash Inc.

The ride-sharing company, which had faced driver shortages during its recovery from pandemic losses, said active drivers are back to September 2019 levels as high inflation pushes many to seek additional sources of income.

The company expects fourth quarter Adjusted EBITDA, a return metric closely watched by investors, to be between $600 million and $630 million. Analysts had expected $569.39 million, according to Refinitiv data.

Gross bookings, or the total dollar value of its services, are expected to grow between 23% and 27%, compared to a 26% increase in the quarter ended September 30.

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

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

Food delivery business grew 24%, up from 37% the previous quarter, indicating that consumers are holding back on food orders as the cost of living rises.

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