Uber’s ride-sharing service edged closer to returning to pre-pandemic levels in the last three months of last year, but its outlook remains clouded by the future direction of the novel coronavirus that has plagued its activity.
The San Francisco-based company’s fourth-quarter results on Wednesday beat analysts’ forecasts. But Uber’s forecast for the current January-March period was slightly lower than Wall Street had hoped, suggesting the omicron variant may have hurt the ride-sharing service early in the new year.
This minor disappointment obviously did not dampen investor enthusiasm for Uber’s progress late last year. Its shares rose about 8% in extended trading after the news broke. Even so, Uber’s stock price still remains more than 30% below its peak of around $64 reached about a year ago.
The latest figures highlight how far Uber has come since the declaration of a global pandemic in March 2020, which triggered government shutdowns that kept most people at home, limiting the need for anyone to summon Uber.
Uber responded by creating a then fledgling food delivery division that now generates nearly half of its revenue. And the company is now benefiting from a gradual resumption of its carpooling service. Riders made a total of 1.77 billion trips on Uber in the last three months of 2021, a 23% increase from the previous year. But the volume remained below the pre-pandemic mark of 1.91 billion trips recorded during the October-December period in 2019.
In another positive sign, Uber has been profitable for two consecutive quarters according to a financial criterion called “adjusted earnings before interest, taxes, depreciation and amortization”.
By this measure, Uber earned $86 million in the last three months of last year, better than the average forecast of $66.6 million from analysts polled by FactSet Research. But Uber predicted it would earn between $100 million and $130 million under the unconventional measure for the January-March period – below analysts’ forecast for $151 million.
Uber was also profitable in the last quarter by accounting standards set by securities regulators, thanks to a $1.4 billion gain in some of its investments, including Aurora, which took over the division. self-driving cars from the ride-sharing service last year.
Buoyed by a windfall, Uber earned $892 million, or 44 cents per share, compared with a loss of $968 million, or 54 cents per share, in the same period a year earlier. Revenue soared 83% from a year earlier to $5.78 billion, about $300 million higher than analysts’ forecasts.
Uber’s delivery division, which expanded from restaurant orders to include groceries, alcohol and even cannabis in some areas, accounted for $2.4 billion in revenue while the ride-sharing service generated $2.3 billion. The rest of the company’s revenue came from its freight division which delivers trade goods and other supplies.