Shares Of Lyft Pull Back After CFO Fixes Major Earnings Release Error

(CTN News) – The shares of Lyft initially rose in extended trading on Tuesday, but then pulled back after the company’s finance chief acknowledged on an earnings call that the press release contained an error.

In accordance with LSEG, formerly Refinitiv, here is how the company performed in comparison to analyst estimates:

• The adjusted earnings per share for the quarter were 18 cents, compared to the expected 8 cents

• There was a revenue of $1.22 billion compared to $1.22 billion expected

Erin Brewer, Lyft’s Chief Financial Officer, indicated on the earnings call that the company had misstated its margin expansion in its press release. Brewer stated that rather than 500 basis points, or 5%, of growth for 2024 as originally stated, the actual increase will be 50 basis points, or 0.5%.

According to Brewer, this is actually a correction to the press release.

Brewer reported that adjusted profit margins will increase to 2.1% from 1.6% in 2023.

After the earnings release, Lyft’s stock rose more than 60% and is currently up approximately 16%. A company with a market capitalization of less than $5 billion has experienced a rapid decline in value of more than $2 billion.

According to Lyft, the company’s net loss for the fourth quarter was $26.3 million, or 7 cents per share, down from $588.1 million, or $1.61 per share, a year earlier. Earnings per share were adjusted to 18 cents.

From $1.175 billion a year ago, Lyft’s revenue increased by 4%.

According to StreetAccount, the first quarter’s gross bookings are expected to be between $3.5 billion and $3.6 billion, exceeding analysts’ estimates of $3.46 billion.

“Given these factors, along with our plans to reduce capital expenditures for 2024 compared to 2023, we expect Lyft to generate positive Free Cash Flow for the full year for the first time,” the company said.

Since the company’s initial public offering in 2019, it has struggled to pay drivers and compete with larger rivals such as Uber. It should be noted that the stock remains more than 80% below its debut price despite Tuesday’s after-hours pop.

It was announced by the company’s CEO David Risher in March last year that the company had reached a record number of annual riders. There were 191 million rides in the fourth quarter of 2018, a 26% increase from a year earlier, and 22.4 million active riders increased 10% from a year earlier to reach 22.4 million.

There was an increase of 14% in gross bookings for the year to $13.8 billion, whereas bookings for the first quarter were up 17% to $3.7 billion.

Prior to Tuesday’s report, Lyft’s shares were down 19% to start the year of 2024. The shares of Uber have risen by 12% over the past week.

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