Lyft shares pull way back after CFO corrects major earnings release error

Lyft shares initially soared in extended trading on Tuesday but pulled way back after the company's finance chief acknowledged on an earnings call that the press release included a major error.

Here's how the company did compared to estimates from analysts according to LSEG, formerly known as Refinitiv:

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

"This is actually a correction for the press release," Brewer said.

The adjusted profit margin as a percentage of bookings will be 2.1%, up from 1.6% in 2023, Brewer added.

Lyft's stock soared more than 60% minutes after the earnings release hit and is now up about 16%. The swift drop represents a market cap decline of well over $2 billion for a company that closed the day valued at less than $5 billion.

Lyft reported a fourth-quarter net loss of $26.3 million, or 7 cents per share, compared with a net loss of $588.1 million, or $1.61 per share, a year earlier. The company posted adjusted earnings of 18 cents a share.

Revenue increased 4% from $1.175 billion a year earlier, Lyft said.

Gross bookings for the first quarter will be $3.5 billion to $3.6 billion, topping analysts' estimates of $3.46 billion, according to StreetAccount.

"Given these factors, along with our plans for slightly lower capital expenditures for 2024 relative to 2023, we anticipate that Lyft will generate positive Free Cash Flow for the full-year for the first time," Lyft said.

The company has struggled since its initial public offering in 2019, as it has bled cash to pay for drivers and compete with larger rival Uber. Even with Tuesday's after-hours pop, the stock is still more than 80% off its debut price.

CEO David Risher, who took the helm in March of last year, said the company reached a record number of annual riders. The number of rides increased 26% from a year earlier to 191 million in the fourth quarter, and active riders rose 10% to 22.4 million.

Gross bookings for the year increased 14% to $13.8 billion, while bookings for the quarter rose 17% to $3.7 billion.

Prior to Tuesday's report, Lyft shares were down 19% to start 2024. Uber shares are up 12%.

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