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(Reuters) – Uber Technologies (NYSE:UBER) Inc on Tuesday forecast fourth-quarter operating profit above Wall Street estimates, betting on cost controls and rising demand for its rides as customers resume spending more on travel, sending its shares up 10%.
With cities reopening and travel booming, consumers are shifting their budgets to services, Chief Executive Dara Khosrowshahi said, compared to the two years of COVID-led lockdowns when they had limited spending to basic needs.
“We’ve seen these trends continue into the fourth quarter, with October tracking to be our best month ever for both mobility and total company gross bookings,” he said as revenue in its rideshare segment rose 73% in the third quarter.
The ride-hailing company, which had faced driver shortages during its recovery from pandemic losses, said active drivers are back to September 2019 levels as decades-high inflation push many to look for sources of additional income.
Uber, however, is also aiming to scale back hiring and reduce expenses to expand profitability amid macroeconomic uncertainties, with Khosrowshahi stressing the importance of “not taking anything for granted”.
“It is just more confirmation that this can be a very profitable business,” Fox Advisors CEO Steven Fox said, highlighting Uber’s goal of $5 billion in operating profit by fiscal 2024.
The company forecast fourth-quarter adjusted EBITDA, a profitability metric keenly watched by investors, between $600 million and $630 million. Analysts were expecting $569.39 million, according to Refinitiv data.
Gross bookings, or the total dollar value from its services, is expected to grow between 23% and 27% compared to a 26% rise in the quarter ended Sept. 30.
Revenue rose 72% to $8.34 billion and adjusted profit was $516 million, both beating estimates. However, quarterly loss came in at $1.2 billion, mainly due to equity investments.
Shares of peers Lyft Inc (NASDAQ:LYFT) and DoorDash Inc, which are scheduled to report results later this month, were up about 5%.
