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Defying inflation, Uber shares rise 13% backed by strong profit estimates

Date: November 02, 2022 Garima Soni Garima Soni
Defying inflation, Uber shares rise 13% backed by strong profit estimates

Uber Technologies Inc. has recently estimated its fourth-quarter operating profit above Wall Street projections, sending its shares up 13%, with a bet on cost control and increased demand for its trips as consumers continue to spend more on vacations.

According to Chief Executive Dara Khosrowshahi, in contrast to the two years of COVID-19-led lockdowns when customers had limited their spending to bare needs, cities are now reopening, and the travel sector is growing.

Even in Europe, where the cost of living has been rising, there has been strong demand for ridesharing and food delivery, Khosrowshahi added. It is worth mentioning here that airport travel helped Ubers monthly active users increase by 14%, surpassing levels from September 2019, while rideshare revenue increased by 73% in the third quarter.

However, as Khosrowshahi warned of potential damage to its overseas earnings resulting from a stronger dollar, Uber is aiming to cut employment and spending to increase profitability.

The company, which had experienced driver shortages in the United States during its recovery from pandemic losses, claimed that the number of active drivers has returned to September 2019 levels due to inflation, which is forcing many people to look for new sources of income.

According to an external source, the business predicted that adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) for the fourth quarter, a profitability indicator closely followed by investors, would be between USD 600 million and USD 630 million surpassing analysts estimate of USD 569.39 million.

In comparison to the 26% increase in the three months ending September 30, gross bookings, or the total dollar value from its services, are anticipated to increase by 23% to 27%.

Notably, both the adjusted profit of USD 516 million and the increase in revenue of 72%, to USD 8.34 billion, exceeded forecasts. However, due to Ubers equity investments, the quarterly loss was USD 1.2 billion.

 

Source Credit:

https://theprint.in/tech/uber-shares-surge-on-solid-profit-forecast-as-rideshare-recovery-defies-inflation/1191991/

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Garima Soni

Garima Soni

Despite starting her career in science, Garima always had a zeal for writing. She started out her writer journey as a freelancer which eventually turned into a full-time job. Now as an upcoming MBA professional, Garima pens down articles for AlpenHornNews and several other websites.