What’s going on?
Uber reported mixed results late on Thursday, but nothing’s going to rain on the ride-hailing giant’s first profitable (ish) quarter.
What does this mean?
Revelers and merry-makers of all kinds are finally back in action, and they’ve been hopping into Ubers to get wherever they need to go. And it shows: the company saw 39% more trips last quarter than the same time last year, and the total value of bookings was up 67%. Uber did so well, in fact, that it finally reported its first-ever quarterly profit.
Take that with a pinch of salt, mind you: the company’s investment in Chinese self-driving car company Didi has plummeted by $3.2 billion, even if it hasn’t realized those losses. A handful of salt, actually: Uber’s profit outlook for this quarter came in worse than expected, maybe because the company’s worried lockdowns are set to make a comeback.
Why should I care?
The bigger picture: Uber has some explaining to do.
Uber’s food delivery service was a gift last year: the drop-off in its ride-hailing segment was – at least in part – offset by Uber Eats, which nearly tripled its revenue last year versus the year before. But it’s still not profitable, even as the ride-hailing segment posted a profit of more than $500 million last quarter. And that won’t help placate impatient investors, who had already sent its stock down 11% this year before the announcement.
Zooming out: Big summer blowout.
Uber isn’t the only “sharing economy” firm to fret about lockdowns: Airbnb previously warned that this summer – usually the busiest time for the vacation rental giant – might be a quiet one. What it didn’t anticipate was that the working-from-home trend would allow vacationers to mix business with pleasure, taking longer and more frequent trips. That helped push its profit up by a massive 280% compared to last year, which might be why investors initially sent its stock up 3%.
—
Originally Posted on November 5, 2021 – Payday
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
