Uber bets on holiday travel demand to forecast strong fourth quarter

(Reuters) – Uber Technologies (NYSE:) forecast fourth-quarter gross bookings and adjusted core profit above market expectations on Tuesday, betting that the holiday season would boost demand for its ride-hailing and food-delivery services.

After a bruising 2022, the dominant U.S. ride-hailing company has benefited from the return-to-office push by companies and resilient travel demand despite inflation.

Uber expects adjusted core profit, a profitability measure watched by investors, between $1.18 billion and $1.24 billion. Analysts expected $1.15 billion, LSEG data showed.

“Consumer demand on our platform remains healthy as we enter the busiest period of the year,” CEO Dara Khosrowshahi said in his prepared remarks.

“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.”

Gross bookings, or the total dollar value earned from its services, is expected to be between $36.5 billion to $37.5 billion in the last three months of the year compared with expectations of $36.31 billion.

The company’s core profit topped expectations for the third quarter, but its revenue growth missed estimates. Uber said certain accounting changes related to how it recognizes revenue impacted growth at its combined mobility and delivery businesses by eight percentage points.

Revenue rose 11%, its slowest since the March 2021 quarter, to $9.29 billion, missing analysts’ average estimate of $9.52 billion. The rate compares to a more than 14% growth in the prior quarter and a 70% surge a year earlier.

Adjusted core profit was $1.09 billion compared to expectations of $1.02 billion.

Revenue from its core ride-share services grew in line with expectations at 33%, supported by a pickup in business-related travel including daily commutes to offices.

Delivery revenue grew 6%, but missed expectations of at least 16% rise.

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