Uber logs profit beat, but its stock turns lower after earnings

The FactSet consensus was for 7 cents a share in earnings.

Uber’s
UBER,
+3.76%
revenue increased to $9.3 billion from $8.3 billion, while the FactSet consensus was for $9.5 billion.

Chief Financial Officer Nelson Chai said in prepared remarks that the company saw a $521 million hit to revenue stemming from “certain business-model changes” that required the company to reclassify some promotions as contra-revenue items, rather than as sales and marketing expenses, although the changes didn’t impact profits.

Gross bookings came in at $35.3 billion, while analysts had been expecting $34.6 billion.

“Our efforts around new use cases are already driving incremental user acquisition, consumer engagement and meaningful scale,” Chief Executive Dara Khosrowshahi said on the earnings call. “We also see tailwinds from the continued shift of consumer spending from retail to services.”

For the fourth quarter, Uber models $36.5 billion to $37.5 billion in gross bookings and $1.18 billion to $1.24 billion in adjusted earnings before interest, taxes, depreciation and amortization. Analysts had been looking for $36.5 billion and $1.16 billion, respectively.

“Published prepared remarks suggest Rides & Delivery continue to perform strongly through the month of October, in contrast to travel peer commentary on macro weakness heading into [the fourth quarter],” Wells Fargo analyst Ken Gawrelski wrote in a note to clients.

Uber previously announced that Chai plans to leave his post. “As our cash flow continues to ramp, and with a new CFO coming on board, next quarter we expect to provide an update on returning capital to shareholders,” Chai said in his prepared remarks Tuesday.

See more: Uber’s outgoing CFO dumps $4.5 million in stock (from August 2023)

Uber shares have climbed 95% so far this year.