Passengers board Uber ride-share cars after arriving at Los Angeles International Airport (LAX) in Los Angeles, California, U.S. July 10, 2022. REUTERS/David Swanson/File Photo
(Reuters) -Uber forecast second-quarter gross bookings below expectations after missing the target for the first three months on Wednesday, sending it shares down nearly 7% before the bell.
The weakness in a key metric that indicates the total value of revenue earned on the Uber platform signals demand weakness for the company's ride-share and food delivery services.
In contrast, smaller rival Lyft posted better-than-expected result and forecast strong second quarter on Tuesday, saying it saw an industry-wide pickup in ride-share demand.
Lyft and Uber have been racing to increase their reach in the ride-share market of the United States and Canada, especially since Lyft hired David Risher as CEO in last April.
Besides aggressively cutting cost, Risher has managed to add users to Lyft with shorter wait times and competitive costs.
Uber said it expects second-quarter adjusted core profit, a key profitability measure, between $1.45 billion and $1.53 billion, with its mid-point of $1.49 billion coming above market expectations of $1.47 billion, according to LSEG data.
It expects gross bookings, or the total dollar value earned from its services, in the range of $38.75 billion to $40.25 billion, below estimates of $40.04 billion.
Uber's performance in the first quarter was weighed down by weakness in its food delivery unit, Uber Eats. However, its profitability push is yielding result as core profit for the first and its forecast exceeded Wall Street expectations.
Revenue rose 15% to $10.13 billion in the quarter ending Mar. 31, narrowly beating the estimate of $10.11 billion.
Mobility revenue grew higher than expected at 30%, while sales at the food delivery unit grew below expectations at 4%.
Gross bookings came in at $37.65 billion, short of expectations of $37.92 billion.
Khosrowshahi said growth in the ride-share business was driven by higher airport and office commutes, while the delivery business benefited from new users and higher frequency of orders.
Uber posted adjusted core profit of $1.38 billion in the first-quarter, an 82% surge from a year ago and above expectations of $1.32 billion.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Arun Koyyur)
