Uber Technologies Inc on Thursday reported its first profitable quarter on an adjusted basis since it launched more than a decade ago with its two most important segments, ride-hailing and restaurant delivery, both turning the corner.
But a massive drop in the value of its stake in Chinese ridehailing company Didi drove a $2.4 billion net loss as Wall Street viewed its larger-than-expected loss per share and fourth-quarter forecast as disappointing. Shares fell 2.7%.
Uber on Thursday forecast an adjusted profit of $25 million to $75 million for the last quarter of 2021. Analysts on average expected $114 million, according to Refinitiv data.
Uber’s earnings followed stellar results by smaller U.S. rival Lyft Inc, which on Tuesday reported its second consecutive quarterly adjusted profit and outlined its path to sustained profitability.
Uber said in the third quarter consumers were travelling in greater numbers and drivers had returned to its platform in the third quarter, suggesting its massive payments to incentivize drivers had paid off.
The California-based company reported adjusted earnings before interest, taxes, depreciation and amortization, a measure that excludes one-time costs, primarily stock-based compensation, of $8 million for the quarter ended Sept. 30. That compared to a loss on the same basis of $625 million a year ago.
But Uber’s growing net loss of $2.4 billion was driven primarily by drop in value of its holding in Chinese ride service Didi and stock-based compensation. Didi, which went public in June, saw its market capitalization drop by billions of dollars after China’s market regulator launched an anti-trust probe.
Uber’s total revenue grew 72% to $4.8 billion, above an average analyst estimate of $4.4 billion, according to IBES data from Refinitiv.
Revenue at its mobility unit, which includes its rides business, grew 62% to $2.2 billion from last year. Revenue was up 36% on a quarterly basis, and unit margins returned to pre-pandemic levels.
Uber Chief Executive Dara Khosrowshahi in a statement said this year’s Halloween weekend surpassed 2019 levels, suggesting Americans were eager to go out.
U.S. airport trips, among the most profitable routes in the industry, increased in recent weeks and were up 20% from the beginning of September, while business trips increased 60%, Uber said.
Uber Chief Financial Officer Nelson Chai in a statement said the company’s core restaurant delivery business was profitable for the first time on an adjusted EBITDA basis in the third quarter.
Uber’s monthly active driver and courier base in the United States has grown by nearly 640,000 since January, but the company did not provide data on how driver numbers compared to pre-pandemic levels.
Uber’s delivery unit, largely made up of the company’s Eats business, continued its success streak, but gross bookings were largely unchanged from the second quarter.
Delivery, which includes restaurant and store deliveries, overall reported an adjusted EBITDA loss of $12 million, bringing the unit close to break-even.
Delivery emerged as Uber’s pandemic backbone. Steady delivery bookings signal the rebound in rides has not come at the expense of food delivery, with consumers sticking to the service even as the economy reopens.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.