By Bill Peters
‘We’re actually not seeing any real signs of cutting costs,’ CEO says
Ride-hailing service Lyft Inc. on Tuesday reported a surprise second-quarter adjusted profit, helped by summer travel and a return to offices, and gave a third-quarter sales forecast that was above expectations.
Shares rallied 10.2% after hours.
Lyft (LYFT)reported the results as some analysts see the ride-sharing industry’s post-pandemic recovery evening out, and as recession fears fade in some corners of Wall Street despite higher prices. Lyft, however, said suggested inflation hadn’t hurt demand.
“We’re actually not seeing any real signs of cutting costs,” Chief Executive David Risher said in an interview with MarketWatch.
The company reported a second-quarter net loss of $114.3 million, or 30 cents a share, compared with $377.2 million, or $1.08 a share, in the same quarter last year. Revenue rose 3% to $1.021 billion from $ 990.7 million in the prior-year quarter.
Adjusted earnings per share came in at 16 cents.
Analysts polled by FactSet expected Lyft to report an adjusted per-share loss of 1 cent, on sales of $1.02 billion.
The company said it expected third-quarter sales of around $1.13 billion to $1.15 billion, compared with FactSet expectations for $1.09 billion.
“We saw momentum across use cases, however commute and early-morning trips were standouts, growing by just over 20% year over year,” Lyft said. “And we had our highest volume of quarterly airport rides since 2019.”
So-called active riders — broadly, riders who take at least one ride during a quarter — rose 8% to 21.5 million. However, revenue made per ride fell during the quarter, after Lyft cut prices in an effort to attract riders.
Lyft has faced executive shakeups and layoffs, as well as tensions with its drivers over benefits and safety concerns. Shares of the company have lagged those of its larger rival, Uber Technologies Inc. (UBER), so far this year. Analysts have been focused on profitability under Risher, who took the job as chief executive in April.
Ahead of the results, BTIG analyst Jake Fuller said the ride-share industry had moved into a “post-recovery mode,” after being upended by pandemic restrictions. Fuller said Uber could still put up solid growth as the economy’s rebound evens out.
While Risher has said Lyft’s price cuts had helped the platform pick up a bigger piece of the ride-share market, a D.A. Davidson analyst said some data showed that the lower prices hadn’t helped demand all that much. However, Monness, Crespi, Hardt & Co. analyst Brian White said that since April, “we’ve noticed a meaningful improvement in Lyft’s value proposition, driven by more competitive pricing.”
“We are curious to see how riders responded to this initiative and the associated financial implications for Lyft, along with the sustainability of the program,” White added.
-Bill Peters
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08-08-23 1620ET
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