Lyft shares rose in extended trading Tuesday by about 60% before falling just 18% after the company’s chief financial officer admitted on an earnings call that the earnings press release contained a major error.
Here’s how the company compared to analyst estimates:
- Earnings per share: 18 cents adjusted versus 8 cents estimated by analysts, according to the London Stock Exchange.
- Revenue: $1.22 billion, versus $1.22 billion expected by analysts, according to the London Stock Exchange.
Lyft Chief Financial Officer Erin Brewer said on the earnings call that the company had missed its margin expansion in the press release. Instead of 500 basis points (5%) of growth for 2024, as the company initially indicated, the actual increase will be 50 basis points (0.5%).
“This is actually a correction to the press release,” Brewer said.
The adjusted profit margin as a percentage of bookings will be 2.1%, up from 1.6% in 2023, Brewer added.
Lyft shares rose more than 60% minutes after the earnings release, before declining and now settling for a rise of about 18%. The rapid decline represents a decline in market value of more than $2 billion for a company that closed the day’s trading worth less than $5 billion.
Lyft, a rival to Uber, said revenue increased 4% from $1.175 billion a year earlier.
Total bookings for the first quarter will be $3.5 billion to $3.6 billion, beating analysts’ estimates of $3.46 billion, according to the Street’s calculation.
“Given these factors, along with our plans to reduce capital expenditures slightly for 2024 compared to 2023, we expect Lyft to generate positive free cash flow for the full year for the first time,” Lyft said.
The company has struggled since its IPO in 2019, bleeding cash to pay drivers and compete with larger rival Uber. Even with an after-hours pop on Tuesday, the stock is still more than 80% off its debut price.
CEO David Risher, who took the helm in March last year, said the company had reached a record number of annual riders. The number of flights increased 26% from a year earlier to 191 million in the fourth quarter, and active rice rose 10% to 22.4 million.
Total bookings for the year rose 14% to $13.8 billion, while bookings for the quarter rose 17% to $3.7 billion.
Before Tuesday’s report, Lyft shares were down 19% since the start of 2024. Uber shares were up 12%.
2024-02-13 23:01:00
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