Lyft shares shed about 7.9% after the ride-sharing app reported lackluster fourth-quarter results and offered weak bookings guidance as it lowers prices to keep up with competition.
The company reported revenue of $1.55 billion, versus the $1.56 billion expected by analysts polled by LSEG. Revenue grew 27% from $1.22 billion a year ago. Bookings, which measures the charges posed to customers for rides and services, came in at $4.28 billion, behind a $4.32 billion FactSet estimate.
“I think what the future holds is great because it’s a huge market, and we’re doing a great job,” CEO David Risher told CNBC’s “Squawk Box” on Wednesday. “We got to figure out how to get the traders on the bus.”
The company did beat expectations on fourth-quarter earnings, reporting an adjusted 29 cents per share compared to the LSEG expectation of 22 cents per share. The figure excluded certain amortization and compensation charges, and a gain from terminating a lease.
Lyft also said it anticipates a slowdown in gross bookings as it grapples with a lower pricing environment. The company expects bookings to range between $4.05 billion and $4.20 billion, versus a $4.24 billion FactSet forecast.
During the earnings call, Chief Financial Officer Erin Brewer said the company lowered prices and used discounts at the end of the year to keep up with the market. Ongoing pricing headwinds could lead to a low single-digit percentage point effect on gross bookings, she added.
Brewer also said the end of its partnership with Delta Air Lines will weigh on rides and gross bookings in the 1% to 2% range during the second quarter.
Last week, Uber shares also declined on mixed fourth-quarter results and soft guidance. The ride-sharing competitor also signaled that it may take years to build out and commercialize autonomous vehicles.
Lyft reported net income of $62.8 million for the period, or 15 cents per share. That is compared to a loss of $26.3 million a year ago, or a loss of 7 cents per share.
During the fourth quarter, Lyft also recorded 24.7 million active riders, ahead of the 24.6 million StreetAccount estimate.
Alongside the results, the company announced a $500 million share repurchase plan and said it aims to roll out its Mobileye-powered taxis as soon as 2026 in Dallas.
