© Reuters. FILE PHOTO: The Lyft Driver Hub seen in Los Angeles
By Tina Bellon and Akanksha Rana
(Reuters) – Elevator Inc (NASDAQ 🙂 said Tuesday it stands by its goal of becoming profitable on an adjusted basis by the end of this year despite the pandemic, and forecast a recovery in hail demand from the second quarter of 2021.
Lyft expects COVID-19 vaccine distribution to increase in the second quarter to allow more people to return to pre-pandemic normalcy, and expects to cut costs of its own to generate a profit.
“Based on current recovery expectations, we should see a slowdown in growth starting in the second quarter and intensifying in the second half of the year,” said Brian Roberts, Lyft’s chief financial officer, in a statement.
Shares rose 6% on the results to $ 53.64 after close of trading.
The company had fourth quarter revenue of approximately $ 570 million, a decrease of 44% year over year but an increase of 14% over the third quarter. According to Refinitiv data, analysts had expected an average of 562 million US dollars in sales.
Lyft posted an adjusted earnings before interest, taxes, depreciation and amortization loss of $ 150 million in the fourth quarter, indicating that the company needs improvement to meet its year-end adjusted EBITDA target. That compares to an adjusted EBITDA loss forecast by analysts of $ 185 million.
The unexpectedly small loss is largely due to Lyft saving more costs than originally anticipated, including on software hosting services, payment processing and insurance, said John Zimmer, the company’s president, in an interview with Reuters.
These $ 360 million fixed cost savings, plus the additional variable cost savings, would allow the company to continue operating more efficiently after drivers return.
“As drivers increase … those lower costs will also help generate higher profit margins,” said Zimmer.
Lyft’s active driver count declined more than 45% annually to 12,552 in the fourth quarter, but revenue per active driver rose from $ 44.40 to $ 45.40.
James Cordwell, an analyst at Atlantic Equities, said those numbers spoke of the pricing power of hail-fighting firms, even during a pandemic.
Lyft shares have bounced back from record lows in the first few months of the US virus outbreak and are trading at roughly the same level as last year. Shares in larger competitor Uber Technologies (NYSE 🙂 Inc are up more than 47% in the past 12 months.
Unlike Uber, Lyft couldn’t offset the decline in hail revenue with grocery delivery services. Uber is expected to report results on Wednesday after the bell.
Lyft executives have previously said they remain focused on moving people, not goods. However, last quarter the company announced that it was working on a white-label or non-Lyft branded platform to facilitate inter-company shipments for groceries, groceries, and grocery packages.
Zimmer told Reuters Tuesday that Lyft’s delivery platform was still in the early stages and that the deal would only be additive. The company hope to announce partners by the middle of this year.
According to Zimmer, Lyft was confident that retailers and restaurants would try to avoid the fees charged by food delivery platforms including Uber Eats, GrubHub (NYSE 🙂 Inc, and others.
“You don’t want Uber Eats to pay the 20% to 30% to do this over the long term,” he said. “These retailers are investing in their own infrastructure, which we would be part of.”