Uber Has Unveiled Its First-ever Share-buyback Program for Up to $7 Billion

Uber Technologies Inc. experienced a 12% surge in its stock on Wednesday following the announcement of its inaugural share-buyback initiative. The company's board has authorized the repurchase of up to $7 billion worth of stock, propelling the stock toward a potential record close, based on Dow Jones Market Data records dating back to May 10, 2019, which marked Uber's stock trading debut.

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Chief Financial Officer Prashanth Mahendra-Rajah framed this move as a vote of confidence in the company's financial trajectory. He emphasized a measured approach to the buyback, starting with actions that offset stock-based compensation and progressing towards a consistent reduction in share count.

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The news of the share-buyback program was unveiled during Uber's virtual investor day, which commenced at 8 a.m. Eastern time. This move had been hinted at previously, with the company indicating last week that more details would be shared during the investor event.

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Uber reported fourth-quarter earnings, revealing a net income of $1.4 billion. However, a significant portion of this, $1.0 billion, was attributed to unrealized gains related to its equity investments. Per-share earnings stood at 66 cents, a notable increase from 29 cents in the same period the previous year, surpassing the FactSet consensus of 16 cents per share.

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Revenue for the quarter climbed to $9.9 billion from $8.6 billion, slightly surpassing the FactSet consensus of $9.8 billion. The company also recorded a 22% rise in gross bookings, reaching $37.6 billion, exceeding analysts' expectations of $37.1 billion. Gross bookings reflect the dollar value of transactions for which riders are charged.

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Looking ahead to the first quarter, Uber anticipates gross bookings in the range of $37.0 billion to $38.5 billion, coupled with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $1.26 billion to $1.34 billion. The FactSet consensus had predicted $37.4 billion in gross bookings and $1.26 billion in EBITDA.

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The stock hit an intraday high of $77.29, making it the leading performer on the S&P 500 for the day and the most actively traded within that index. Over the last 12 months, Uber's stock has more than doubled, contrasting with the S&P 500's 21% gain over the same period. This surge underscores the positive reception of Uber's financial performance and strategic moves in the market.

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