Aug 5 - Uber Technologies issued guidance for the current quarter that puts adjusted earnings per share below analyst expectations and flagged currency effects as a dampener on reported bookings growth. At the same time, management restated its intention to press ahead with sizeable investments in autonomous vehicle technology and pursue acquisition activity funded from on-hand liquidity and debt.
The company set third-quarter gross bookings guidance in a range of $58.25 billion to $60.25 billion, roughly centered on Street estimates of $59.21 billion. Uber said foreign exchange should reduce reported third-quarter gross bookings growth by about one percentage point compared with the prior year, after FX had helped boost growth over the prior four quarters.
Uber reported second-quarter gross bookings of $58.02 billion, topping analysts' estimates of $57.06 billion. Adjusted core earnings for the quarter similarly outperformed expectations. Revenue rose 12% to $14.19 billion, narrowly missing consensus of $14.24 billion; the company said an accounting change in Britain lowered reported sales growth without altering the underlying economics.
Management highlighted broad-based demand across regions and services during the quarter, including travel activity related to the FIFA World Cup. The company said more than 8 million tourists used Uber in host cities during the tournament, and that it added more first-time users over the past year than in any comparable period of the previous five years, contributing to a 24% increase in gross bookings year over year.
Operating expenses grew about 10% in the second quarter, with higher outlays across marketing, research and development, and administrative functions. For the current quarter, Uber forecast adjusted earnings per share of $0.84 to $0.88, slightly below analysts' expectations of $0.89.
On capital allocation, the company reiterated plans to spend more than $10 billion on autonomous vehicles over the coming years but did not attach a specific timetable to that commitment. Uber also recently unveiled a $14.8 billion agreement to acquire Delivery Hero, indicating it will fund that transaction with existing liquidity and debt.
Shares traded lower in premarket trade, down about 3% following the outlook and the reiterated investment plans.
Context for markets and investors
- Guidance that falls short of estimates and elevated near-term spending weighed on investor sentiment as indicated by the premarket share decline.
- Foreign exchange is expected to modestly reduce reported growth metrics for the quarter, which may affect revenue and bookings comparisons.
- Large, multi-year commitments to autonomous vehicle development and recent large-scale acquisition financing are central to the company's capital allocation profile going forward.