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Uber Up On Upbeat Outlook, Misses Estimates: ETFs in Focus
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Ride-hailing giant Uber (UBER - Free Report) on Tuesday reported third-quarter earnings results before market opened. The company posted revenue of $9.29 billion in the period, which missed Zacks Consensus Estimate of $9.47 billion while its earnings of 10 cents per share fell short of Zacks Consensus Estimate of 13 cents. However, the company predicted strong holiday-quarter demand. Shares gained 3.7% in the key trading session on Nov 7, 2023.
The company's move to change how it recognizes some of its revenue affected growth at its ride-hailing and food-delivery businesses by eight percentage points and resulted in revenue missing third-quarter expectations.
Inside the Quarterly Results
Although the company missed estimates on both lines, it revealed strength in other areas, like gross bookings, which topped the company’s guidance. Uber’s mobility segment reported $5.07 billion in revenues, compared with delivery’s $2.93 billion. Its freight business booked $1.28 billion in sales for the quarter, marking a 27% slump year over year.
Upbeat Outlook
For the fourth quarter of 2023, Uber said it expects to report gross bookings between $36.5 billion and $37.5 billion, compared with StreetAccount estimates of $36.5 billion (as quoted on CNBC), and adjusted EBITDA of $1.18 billion to $1.24 billion, above estimates of $1.15 billion, LSEG data showed (per Reuters, quoted on Business Standard).
CEO Dara Khosrowshahi said "consumer demand on our platform remains healthy as we enter the busiest period of the year," per Reuters. He went on explaining that "the upbeat trend continued into the fourth quarter as [Uber] achieved all-time highs in October for overall trips and gross bookings, driven by strength across both mobility and delivery."
Gross bookings, or the total dollar value earned from its services, is expected in the range of $36.5 billion to $37.5 billion, compared with expectations of $36.31 billion, as quoted on Business Standard. "With driver supply also remaining strong in the (third) quarter, at a record 6.5 million active drivers, the company appears well-positioned to generate strong results," said analysts at William Blair, per Reuters.
ETFs In Focus
Uber has a Zacks Rank #1 (Strong Buy). It has an upbeat VGM (Value-Growth-Momentum) score of “B”. The stock hails from an upbeat Zacks Industry (with rank in top 34%) and Sector (with rank in the top 25%). While investors will closely watch Uber in the ongoing quarter, ETFs that are heavy on Uber should also be watched. Uber-heavy ETFs will also be impacted with its earnings.
ETFs with Uber Technologies Exposure
iShares US Transportation ETF (IYT - Free Report) – Uber has 13.30% exposure
First Trust US Equity Opportunities ETF (FPX - Free Report) – Uber has 8.91% exposure
Franklin Disruptive Commerce ETF (BUYZ - Free Report) – Uber has 5.75% exposure
Image: Bigstock
Uber Up On Upbeat Outlook, Misses Estimates: ETFs in Focus
Ride-hailing giant Uber (UBER - Free Report) on Tuesday reported third-quarter earnings results before market opened. The company posted revenue of $9.29 billion in the period, which missed Zacks Consensus Estimate of $9.47 billion while its earnings of 10 cents per share fell short of Zacks Consensus Estimate of 13 cents. However, the company predicted strong holiday-quarter demand. Shares gained 3.7% in the key trading session on Nov 7, 2023.
The company's move to change how it recognizes some of its revenue affected growth at its ride-hailing and food-delivery businesses by eight percentage points and resulted in revenue missing third-quarter expectations.
Inside the Quarterly Results
Although the company missed estimates on both lines, it revealed strength in other areas, like gross bookings, which topped the company’s guidance. Uber’s mobility segment reported $5.07 billion in revenues, compared with delivery’s $2.93 billion. Its freight business booked $1.28 billion in sales for the quarter, marking a 27% slump year over year.
Upbeat Outlook
For the fourth quarter of 2023, Uber said it expects to report gross bookings between $36.5 billion and $37.5 billion, compared with StreetAccount estimates of $36.5 billion (as quoted on CNBC), and adjusted EBITDA of $1.18 billion to $1.24 billion, above estimates of $1.15 billion, LSEG data showed (per Reuters, quoted on Business Standard).
CEO Dara Khosrowshahi said "consumer demand on our platform remains healthy as we enter the busiest period of the year," per Reuters. He went on explaining that "the upbeat trend continued into the fourth quarter as [Uber] achieved all-time highs in October for overall trips and gross bookings, driven by strength across both mobility and delivery."
Gross bookings, or the total dollar value earned from its services, is expected in the range of $36.5 billion to $37.5 billion, compared with expectations of $36.31 billion, as quoted on Business Standard. "With driver supply also remaining strong in the (third) quarter, at a record 6.5 million active drivers, the company appears well-positioned to generate strong results," said analysts at William Blair, per Reuters.
ETFs In Focus
Uber has a Zacks Rank #1 (Strong Buy). It has an upbeat VGM (Value-Growth-Momentum) score of “B”. The stock hails from an upbeat Zacks Industry (with rank in top 34%) and Sector (with rank in the top 25%). While investors will closely watch Uber in the ongoing quarter, ETFs that are heavy on Uber should also be watched. Uber-heavy ETFs will also be impacted with its earnings.
ETFs with Uber Technologies Exposure
iShares US Transportation ETF (IYT - Free Report) – Uber has 13.30% exposure
First Trust US Equity Opportunities ETF (FPX - Free Report) – Uber has 8.91% exposure
Franklin Disruptive Commerce ETF (BUYZ - Free Report) – Uber has 5.75% exposure
ProShares On-Demand ETF (OND - Free Report) – Uber has 5.61% exposure
Clockwise Core Equity & Innovation ETF (TIME - Free Report) – Uber has 5.57% exposure