Uber Technologies stock slid early Thursday, despite reporting third quarter earnings and sales that beat expectations. Gross bookings for the the ride-hailing and food delivery company grew slower than expected for the third quarter.
Uber said that it earned $1.20 per share on sales of $11.19 billion for the September-ended quarter. Analysts polled by FactSet projected the San Francisco-based company would post earnings of 37 cents per share on sales of $10.99 billion. However, Uber's earnings were helped by a $1.7 billion pre-tax benefit on unrealized gains from equity investments. Uber's total net income for the quarter was $2.6 billion.
For the same period a year earlier, Uber posted earnings of 10 cents per share on sales of $9.29 billion.
"We delivered yet another record quarter of profitable growth at a global scale, reflecting the strength of our platform, which now has over 25 million Uber One members," Chief Executive Dara Khosrowshahi said in a news release.
On the stock market today, Uber stock fell more than 7% to 73.25 pre-market trades. Uber stock had gained 29% year-to-date heading into the earnings report.
Uber Stock: Gross Bookings Miss
The problem for Uber appears to be in its gross bookings, a metric that includes the total value of fares charged for rides as well as meals order through the Uber Eats app. Uber's gross bookings totaled $40.97 billion for the quarter, missing estimates of $41.25 billion, according to FactSet.
Delivery bookings grew 17% to $18.7 billion while rides bookings grew 24% to $21 billion.
For the current quarter, Uber guided for gross bookings of $43.5 billion at the midpoint of its range. Analysts were projecting $43.7 billion in gross booking for the December-ending period, according to FactSet.
Meanwhile, Uber's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached $1.7 billion, ahead of analyst estimates for $1.64 billion.
"Uber continues to deliver solid growth and margin expansion but expectations have risen accordingly and the magnitude of profit beats has normalized in recent quarters," Wedbush analyst Scott Devitt wrote following Uber's report. "Shares are down pre-market reflecting slightly slower bookings growth and adjusted EBITDA guidance that likely did not clear investor expectations despite being in line with consensus at the midpoint of the guide."
Total trips through Uber grew 17% year-over-year to 2.9 billion. Uber said it expects a similar growth rate for the fourth quarter.
Uber Focused On Smaller Deals Amid Expedia Rumors
The Financial Times reported earlier this month that Uber had considered acquiring online travel booking company Expedia. Uber stock fell 2.5% on Oct. 17 on the report.
In an interview with CNBC early Thursday, Khosrowshahi declined to comment on Expedia directly but said Uber is focused on "organic growth."
Beyond that, he added that Uber has a high bar for any acquisition.
"To the extent that we go out and do M&A, it will tend to be at this point smaller deals that are much more closer to home in terms of what we do," Khosrowshahi told CNBC.
Prior to the report, Uber had an IBD Composite Rating of 88 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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