The massive ride-hailing company Uber (UBER.N), which saw growth impeded between July and September, forecasted on Tuesday that robust demand over the Christmas quarter would boost earnings beyond what experts had anticipated.
Income for the third quarter fell short of projections due to the company’s decision to alter how it recognizes a portion of its revenue, which had an eight percentage point negative impact on growth at its food delivery and ride-hailing operations.
Lyft, which has lowered rates to attract passengers as persistent inflation raises concerns about ride-share demand, is a fierce rival for Uber.
However, CEO Dara Khosrowshahi made a positive statement. “Consumer demand on our platform remains healthy as we enter the busiest period of the year,” he stated.
“This trend continued into the fourth quarter as we achieved all-time highs in October for overall trips and gross bookings, driven by strength across both mobility and delivery.”
According to LSEG statistics, Uber anticipates its fourth-quarter adjusted core earnings, a crucial indicator of profitability, to be between $1.18 billion and $1.24 billion, above projections of $1.15 billion.
In contrast to projections of $36.31 billion, gross bookings, or the total monetary value received from its services, are anticipated to be between $36.5 billion and $37.5 billion.
“With driver supply also remaining strong in the third quarter, at a record 6.5 million active drivers, the company appears well-positioned to generate strong results,” according to William Blair analysts.
Lyft, which will release its profits on Wednesday, will also profit from the optimism around travel demand over the holiday season, a critical time for businesses like hotels and airlines.
Uber’s third-quarter revenue of $9.29 billion, behind projections of $9.52 billion, increased at the slowest rate since 2021.
Although net profits per share fell short of predictions by two cents, adjusted core profit of $1.09 billion exceeded expectations of $1.02 billion. Following erratic premarket activity, its shares increased by more than 2%.