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Trends & Analysis
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Trends & Analysis
News

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News

Walmart’s stock hits record high on Q1 results

News

Crude oil rises on US supplies, inflation data

News

Another nice quarter for NVIDIA?

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Alibaba delivers earnings miss, shares slide

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USD edges lower ahead of key economic reports

News

Uber shares climb despite downbeat Q3 results

 

Wednesday, November 08, 2023

Today’s headlines

What’s happening: Shares of Uber Technologies gained on Tuesday, after the company released results for the third quarter.

What happened: The biggest ride-sharing firm reported downbeat results for the latest quarter, despite a surge in bookings at its mobility and delivery divisions.

Uber Technologies reported a sharp decline in bookings at one of its major segments in the quarter.

How were the results: The San Francisco, California-based company swung to a profit in the three months ended in September.

  • Revenues grew 11% year-over-year to $9.29 billion but missed the consensus estimates of $9.52 billion.
  • Earnings came in at 10 cents per share, versus a year-ago loss of 61 cents per share. This, too, was below the Wall Street expectations of 12 cents per share.

Why it matters: Last year was tough for Uber, as people continued to work from home and hybrid models gained popularity. However, in the latest quarter, many companies insisted on employees returning to working from the office, which benefitted Uber. The resilient demand for travel, despite higher inflation, also lent support to the ride-hailing firm.

Uber’s gross bookings climbed 21% year-over-year to $35.3 billion, while bookings at Uber’s Mobility unit jumped 31% to $17.9 billion and at its Delivery unit grew by 18% to $16.1 billion. However, gross bookings at its Freight segment contracted by 27% to $1.3 billion.

Uber company said it had 142 million monthly active platform consumers, representing a 15% increase. CEO Dara Khosrowshahi said the company’s trip growth had accelerating to 25%.

The ride-sharing company held cash and equivalents worth $5.2 billion and generated free cash flows of $905 million in the quarter.

Management guided to gross bookings between $36.5 billion and $37.5 billion and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) between $1.18 billion and $1.24 billion for the fourth quarter. These were broadly in-line with market expectations.

How shares responded: Uber’s shares rose 3.7% to close at $49.92 on Tuesday, following the release of quarterly results. The stock has added around 97% year to date.

What to watch: Investors will watch the demand for travel during the upcoming holiday season, which usually is a peak travel period. Markets will also monitor global economic growth data, as this boosts business travel.

The markets today

The Canadian dollar will be in focus today ahead of building permits data

Context: The CAD/USD forex pair fell on Tuesday, amid a downturn in oil prices.

Details: The CAD/USD forex pair fell below the 1.37 level, moving closer to the one-year low of 1.39 recorded on November 1.

The decline in prices for crude oil, one of Canada’s major exports, weighed on the loonie on Tuesday. WTI crude oil prices lost $3.45 to settle at $77.37 per barrel.

Positive economic data failed to support the Canadian dollar. Canada recorded a trade surplus of C$2 billion in September, versus C$0.95 billion in the prior month. This was the widest surplus since June 2022 and was significantly better than market expectations of a C$1 billion surplus.

Exports from Canada grew 2.7% to $67.03 billion, rising for the third straight month, while imports rose 1.0% to $64.99 billion in September.

Despite the positive economic data, there were growing speculations of the Bank of Canada beginning to lower its key interest rates from April next year.

Strength in the US dollar also exerted pressure on the loonie on Tuesday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.3% to reach 105.54.

The CAD/USD forex pair fell around 0.5% to 1.3768 on Tuesday. The S&P/TSX Composite Index dipped 0.85% to close at 19,575.59.

What to watch: Investors await the release of economic data on the value of building permits from Canada today. The total value of building permits in Canada, which increased by 3.4% to $11.9 billion in August, is projected to decline by 0.5% in September.

Other Markets: European indices closed mostly lower on Tuesday, with the FTSE 100, CAC 40 and STOXX Europe 600 Index down by 0.10%, 0.39% and 0.16%, respectively, and the DAX 40 up by 0.11%.

The news shaping the markets

Ukraine said Russian troops were regrouping for a third wave of attack on key eastern town of Avdiivka. The news sent the safe-haven US dollar index slightly higher this morning.


The Philippines said its unemployment rate had eased to 4.5% in September, from 5.0% in the year-ago month, lending support to the PHP/USD forex pair.


Australia’s private house approvals fell by 4.6% to 8,338 units in September, in-line with the preliminary reading, which sent the AUD/USD pair higher in forex trading this morning.


Japan’s Reuters Tankan sentiment index for manufacturers increased to +6 in November, versus a reading of +4 in October. However, the report highlighted a tough quarter ahead, which exerted pressure on the JPY/USD forex pair.


South Korea recorded a current account surplus of $5.42 billion in September. This being the fifth month in a row of surplus sent the KRW/USD pair higher in forex trading this morning.

What else to watch today

Germany’s inflation rate, France’s balance of trade, current account and foreign exchange reserves, Italy’s retail sales, Eurozone’s retail sales, Spain’s consumer confidence indicator, Russia’s total vehicle sales, Brazil’s gross debt to GDP, government budget value, retail sales, car registrations and car production, as well as US MBA mortgage applications, wholesale inventories and IBD/TIPP economic optimism index.


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