(Reuters) – Lyft Inc on Thursday forecast current-quarter revenue below Wall Street estimates, blaming extremely cold weather in some of its major markets and lower prices, especially during peak hours, sending its shares down 23% in extended trading.
The company’s outlook was in contrast to that of its larger rival Uber Technologies Inc, whose strong presence globally is helping it ride a boom in demand for ride-hailing services from travelers and office-goers
Lyft’s bigger presence on the U.S. West Coast, a region that analysts have said was trailing the rest of the United States in return to pre-COVID demand, could be hurting its recovery compared with Uber.
Company president John Zimmer said in an interview that the West Coast had “not fully” recovered but noted a “material improvement”.
Lyft forecast first-quarter revenue of about $975 million, which fell below analyst estimates of $1.09 billion, according to Refinitiv data.
Its forecast for first-quarter adjusted earnings before interest, taxes depreciation and amortization (EBITDA), a key measure of profitability that strips out some costs, was between $5 million and $15 million.
For the fourth quarter, Lyft reported an adjusted EBITDA of $126.7 million, excluding $375 million it had set aside for increasing insurance reserves. Analysts had forecast $91.01 million.
“We wanted to ensure we strengthened our insurance reserve … the purpose of doing that is to ensure we don’t have that type of volatility going forward, because we did such a large reserve on the high end of what we could expect given the size of our insurance book,” Zimmer said in an interview.
Active riders rose 8.7% increase to 20.36 million for the fourth quarter, Lyft said. Analysts were expecting 20.30 million, according to FactSet estimates.
Rideshare was “really back … we’re happy with the current marketplace conditions,” Zimmer said.
Revenue rose 21% to $1.18 billion, slightly above the average estimate of $1.16 billion.
(Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva)
