Yesterday, the stocks of the cooperative transport company Lyft surged by over 60% in late trading on Wall Street. This unexpected increase was due to a spelling error in the company’s most recent financial report. The error led investors to believe that the company’s profits would be significantly higher than anticipated.
In the financial report, Lyft had stated that its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) as a percentage of the company’s orders was expected to reach 5%. However, this figure was incorrect. The actual percentage is expected to be 0.5%, which is ten times less than the reported figure.
Lyft’s Chief Financial Officer, Erin Brewer, highlighted this error during an earnings call with analysts. Following this announcement, the surge in the company’s stocks cooled down to approximately 16%.
Despite this error, Lyft reported positive results for the current quarter. The company reported revenues of $1.2 billion and an annual growth of 4%. Lyft also managed to significantly decrease its losses. The company reported a net loss of $26.3 million, which is a huge improvement compared to the loss of $588 million reported in the fourth quarter of 2022.
According to CNBC, Lyft anticipates that its revenue from orders for the next quarter will be between $3.5 billion and $3.6 billion. This projection is higher than analysts’ estimate of $3.46 billion. Moreover, for the first time in 2024, the company expects to generate a positive free cash flow.
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