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Uber Technologies Inc.’s stock jumped 5.6% premarket Wednesday, after the ride-sharing company announced its first-ever share-buyback program with its board authorizing the repurchase of up to $7 billion worth of stock.
Chief Financial Officer Prashanth Mahendra-Rajah said the move was a vote of confidence in the company’s financial momentum.
“We will be thoughtful as it relates to the pace of our buyback, beginning with actions that partially offset stock-based compensation, and working towards a consistent reduction in share count,” he said in a statement.
The ride-sharing company also said its virtual investor day will start Wednesday at 8 a.m. Eastern time.
Uber previously teased a coming capital-return program, and said last week it would share more at Wednesday’s investor event.
Uber
UBER,
reported fourth-quarter earnings showing net income of $1.4 billion, but $1.0 billion of that came from unrealized gains related to its equity investments.
Per-share earnings came to 66 cents, compared with 29 cents in the same period a year ago. The FactSet consensus was for 16 cents a share in earnings.
Revenue rose to $9.9 billion from $8.6 billion, while the FactSet consensus was for $9.8 billion. The company logged a 22% rise in gross bookings to reach $37.6 billion, while analysts had been looking for $37.1 billion.
Gross bookings captures the dollar value of transactions for which riders are charged.
Looking to the first quarter, Uber is anticipating $37.0 billion to $38.5 billion in gross bookings along with $1.26 billion to $1.34 billion in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda). The FactSet consensus called for $37.4 billion and $1.26 billion, respectively.
For more, read: Uber faced high expectations into earnings, but it cleared the hurdle
The stock jumped 4% premarket and has gained 96% in the last 12 months, while the S&P 500
SPX,
has gained 19.6%.
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