: Uber stock has best day in nearly a year, heads for IPO price

Uber Technologies Inc., which has lost billions of dollars since its inception, disclosed on Tuesday that it expects to show profit on a highly adjusted basis one quarter earlier than it had previously stated, sending its stock higher.

Shares of Uber
UBER,
+11.64%

were up nearly 13% to $44.95 in afternoon trading, giving the stock a chance to close above its initial public offering price of $45 for the first time since July. Shares were on pace for their largest percentage increase in more than 10 months, since Nov. 4, 2020. Uber’s shares have declined about 12% year to date, while the S&P 500 index
SPX,
+0.30%

has increased about 16% so far this year.

Uber expects adjusted earnings before interest, taxes, depreciation, and amortization, also known as Ebitda, between a loss of $25 million and a gain of $25 million for the third quarter, according to a Tuesday filing with the Securities and Exchange Commission. The ride-hailing and delivery company had previously expected an adjusted loss of less than $100 million for the third quarter.

The company also raised its outlook for gross bookings for the quarter to between $22.8 billion and $23.2 billion, from $22 billion to $24 billion.

For the fourth quarter, Uber said it expects to post an adjusted profit of between $0 and $100 million.

Uber has never turned an annual profit and has only posted two quarterly profit totals in the past, both of which relied on gains in its investment in Didi Global Inc.
DIDI,
-1.61%
.
Under pressure to post a profit, the company has increasingly cut discounts and incentives, one of the reasons prices of rides have climbed higher.

The ride-hailing business slowed drastically at the beginning of the coronavirus pandemic last year, forcing Uber and its biggest competitor, Lyft Inc.
LYFT,
+6.92%
,
to adjust by selling businesses and cutting costs, including laying off thousands of employees. Uber did receive a boost from its delivery business, Uber Eats, which has outperformed its rides unit during the pandemic. Uber’s expectation of Ebitda profit comes after Lyft reported adjusted-Ebitda profit in the second quarter.

This post was originally published on Market Watch

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