By Yuvraj Malik
(Reuters) -Lyft gave a soft forecast for the current quarter ending September on Wednesday, taking the sheen off strong second-quarter results and sending its shares down 14% before the bell.
Lyft (NASDAQ:) and its larger rival Uber (NYSE:) are battling to service a boom in ride-share demand from summertime tourism and as people step out more frequently for work and leisure activities.
The company forecast gross bookings – the total value of transactions on the Lyft app excluding tips – between $4.0 billion and $4.1 billion, compared to analysts’ consensus estimates of $4.13 billion from LSEG.
Adjusted core earnings guidance of $90 million to $95 million also came in below the street target of $104.3 million.
Uber reported a strong quarter on Tuesday, but its gross bookings guidance also came in just shy of the street target for July to September, regarded as the peak tourist period.
Uber has a global footprint and diversified business, which includes food delivery and parcel services, while Lyft operates ride-hailing services in the U.S. and Canada.
For the second quarter, Lyft reported better-than-expected revenue and posted a net profit for the first time, driven in part by cost cuts last year.
Since CEO David Risher took charge last year, Lyft has cut hundreds of jobs, narrowed the firm’s losses and managed to keep fare increases in check. The early efforts fueled a 36% surge in Lyft stock in 2023.
In June, Lyft hosted its first-ever investor day and projected annual gross bookings to grow at a steady 15% rate through 2027. It has also made a big push in advertising, a high margin business, with $50 million sales expected this year.
Revenue rose 41% to $1.44 billion in the quarter ended June 30, beating estimate of $1.39 billion.
Net income was $5.0 million, compared to a $114.3 million net loss in the previous corresponding period when the company booked $46.6 million in restructuring-related charges.