“Coming off a strong Q3, we’re continuing to take a prudent approach to managing our business to ensure we’re successful over the long term,” said CEO Logan Green.
Lyft (LYFT) – Get Lyft Inc. Report shares plunged lower Tuesday after the smaller ride-sharing rival to Uber Technologies (UBER) – Get Uber Technologies Inc. Report posted a surprise third quarter loss and a disappointing holiday season forecast.
Lyft’s third quarter loss of $1.18 per share, against a Street forecast of a 7 cents per share profit, came amid a muted boost in active riders for the group, which rose 7.2% from last year to 20.3 billion but missed Street forecasts, with revenues per rider up 13.7% to $51.88.
Adjusted earnings came in at $66.2 million, just ahead of Lyft’s own guidance of between $55 million and $65 million. Overall revenues were pegged at an all-time high of $1.054 billion, Lyft said, but that tally will only rise to between $1.145 and $1.165 billion over the final three months of the year, contrasting sharply with Uber’s upbeat forecast from last week.
The group has also frozen hiring, laid off around 683 people — around 13% of its staff — and slashed operating expenses as it braces for a potential domestic downturn, with the collective costs expected to clip between $27 million and $32 million from its fourth quarter bottom line.
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“Coming off a strong Q3, we’re continuing to take a prudent approach to managing our business to ensure we’re successful over the long term,” co-founder and CEO Logan Green told investors on a conference call late Monday. “As I said last quarter and would like to reinforce today, we’re confident in our ability to continue navigating near-term headwind to deliver strong, long-term business results. Time and time again, we’ve proven our ability to make hard decisions and overcome difficult challenges.”
Lyft shares were marked 19.3% lower in pre-market trading to indicate an opening bell price of $11.41 each.
Last week, Lyft’s larger rival, Uber, posted stronger-than-expected third quarter revenues of $8.34 billion and forecast firmer near-term profits a growth in its rides business offset a modest slowdown in food deliveries.
Looking into the final months of the year, Uber said it sees adjusted earnings of between between $600 million and $630 million, well ahead of the Refinitiv consensus of $569.4 million, with gross bookings rising between 23% and 27%.
“Although we have some concerns about the pace and breadth of Lyft’s broader post-Pandemic revenue recovery, the company has done a solid job monetizing its active rider base over the past few quarters,” said D.A. Davidson analyst Tom White, who lowered his price target on the stock by $6, to $19 a share, following last night’s earnings update.
“As overall consumer demand for ridesharing continues to improve in the face of economic re-opening, we believe Lyft can continue to make steady progress over the next several quarters restoring the general health/balance/service levels of its marketplace (and increase its active rider base in the process).”
