Why Uber's stock is having a bumpy ride after earnings

By Emily Bary

Investors may have underestimated how much foreign exchange would impact Uber's business

Uber Technologies Inc. posted mixed earnings on Wednesday, beating estimates on an adjusted profit metric while giving an outlook for bookings that was below expectations.

The company expects $38.75 billion to $40.25 billion in gross bookings for the current quarter, along with $1.45 billion to $1.53 billion in adjusted earnings before interest, taxes, depreciation and amortization. Analysts were modeling $40 billion and $1.49 billion, respectively.

Uber (UBER) anticipates that currencies will create a headwind on bookings for year-over-year growth to the tune of 3 percentage points, or 5 points to the mobility business. Bookings is defined as the total dollar value of things like rides and delivery orders.

"We think investor expectations have gotten ahead of the stock following the company's analyst day in mid-February," Wedbush analyst Scott Devitt wrote in a note to clients. "Recent currency headwinds may have also been overlooked by the Street and investors and the magnitude of the [foreign-exchange] impact in [the second quarter] is notable."

Shares are down 7% in premarket trading Wednesday. The stock was up 14% so far this year and 81% on a 12-month basis through Tuesday's close.

For the first quarter, Uber reported $37.7 billion in bookings, up 20% from a year before, while analysts were modeling $37.9 billion. Revenue rose to $10.1 billion, up 15% from a year before. That was flat with the consensus view.

The company logged a net loss of $654 million, or 32 cents a share, whereas it posted a net loss of $157 million, or 8 cents a share, a year before. Uber's net-loss figure included a $721 million net headwind related to the revaluation of equity investments, which led to an unrealized loss.

Analysts were modeling 22 cents in earnings per share.

Uber reported $1.4 billion in adjusted Ebitda for the latest quarter, while the FactSet consensus was for $1.3 billion.

"Our results this quarter once again demonstrate our ability to deliver consistent, profitable growth at scale," Chief Executive Dara Khosrowshahi said in a release.

Wedbush's Devitt wrote that "the underlying business remains healthy, and we would opportunistically buy any near-term pullbacks in shares."

-Emily Bary

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05-08-24 0923ET

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