Uber Falls Nearly 7% as a Soft Third-Quarter Outlook Overshadows Record Bookings

Uber stock fell nearly 7% in Wednesday afternoon trading, changing hands near $67 after closing at $71.99 on Tuesday. The company reported second-quarter results before the open. Bookings and profit both grew at a double-digit clip. What investors settled on instead was the outlook for the current quarter, which came in light.

The quarter itself was strong.

Bookings hit $58 billion and profit rose a third

Gross bookings, the total dollar value of rides and deliveries on the platform, reached $58.0 billion in the June quarter, up 24% from a year earlier, according to Uber’s earnings release. Revenue grew 12% to $14.2 billion. That figure landed just under the $14.24 billion analysts had modeled, per reporting from CNBC and Yahoo Finance, though adjusted earnings of 81 cents a share matched the consensus estimate.

Profitability moved the other way. Adjusted EBITDA climbed 33% to $2.8 billion, and the margin against gross bookings widened to 4.9% from 4.5% a year earlier. On a GAAP basis Uber reported net income of $2.4 billion and diluted earnings of $1.17 a share. Trips rose 18% to 3.9 billion as monthly active platform consumers grew 16% to 208 million.

By most measures the June quarter beat. The market spent Wednesday reading the guidance.

The forecast came in at the low end

For the third quarter, Uber guided to gross bookings of $58.25 billion to $60.25 billion, which it framed as 18% to 22% growth on a constant-currency basis. The midpoint of that range sits just below the $59.3 billion analysts had penciled in, according to CNBC and MarketScreener. The company also projected adjusted EBITDA of $2.86 billion to $2.96 billion.

The earnings guide told the same story. Uber’s forecast implied adjusted earnings of 84 to 88 cents a share for the quarter, a range whose midpoint falls under the 89-cent consensus, both outlets reported. None of the shortfalls was large. But after a run of quarters that cleared the bar, a set of numbers that merely met it, paired with an outlook that did not, was enough to send the stock down.

The slide breaks a flat stretch

Before Wednesday, Uber had gone almost nowhere for a month. Tuesday’s $71.99 close sat within a percent of where the stock traded in late June. The drop changed that: at Wednesday’s intraday level the shares were down about 6% over the trailing 30 days.

Volume backed up the move. About 34 million shares had changed hands by early afternoon, 2.1 times the stock’s 20-day average, and the intraday price sat near the bottom of its 90-day range of $65.94 to $79.17. Even after the decline Uber carries a market value of $137 billion. The stock trades 34% below its 52-week high of $101.99, and 13% above the 52-week low of $59.33.

What to watch

Management hosted its earnings call Wednesday morning, where the questions center on whether bookings growth can hold in the high-teens-to-low-20s range the company guided to. The next read on that arrives with third-quarter results this fall. Also worth tracking is how much of the current-quarter caution reflects currency effects, which the company breaks out in its constant-currency figures, versus underlying demand. For now the June figures are on the record, and the market has priced its reaction to the outlook that came with them.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.