(Bloomberg) — It was, without a doubt, a strong earnings report.
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Lyft Inc. projected adjusted earnings as much as 11% higher than analysts’ estimates, and reported bookings ahead of expectations. And then there was the outlook for profitability: Margins, the ride-hailing provider said in an initial press release, were set to expand this year by an eye-watering 500 basis points. Shares surged, jumping 67% in after-hours trading.
But the projection was off. Way off.
Less than an hour after issuing the statement, Lyft Chief Financial Officer Erin Brewer joined a call with analysts and said the company is actually expecting margins to expand by 50 basis points — not 500 — acknowledging, when asked by an analyst, that the press release was incorrect. A company spokesperson later attributed the mistake to a “clerical error” and noted the figure would be corrected in filings.
It was unclear when the revisions would be filed, but shares almost immediately began giving up gains. By the time premarket trading opened on Wednesday morning, the gain had pared to about 17%.
It’s a “black-eye moment” for Lyft, said Dan Ives, an analyst at Wedbush Securities, “a debacle of epic proportions.” He said by email that he’d “never seen an error like this in my almost 25 years on the Street.”
The mistake overshadowed what was otherwise a solid beat on profit and bookings projections that signaled a years-long effort to boost ridership and challenge Uber Technologies Inc. may be paying off.
In fact, both Lyft and Uber delivered strong earnings reports this quarter, suggesting continued growth in overall rider demand since a nationwide plunge during the pandemic. The two have spent fiercely to recruit and retain enough drivers to meet the rise in orders. Lyft Chief Executive Officer David Risher, who took the helm less than a year ago, has focused the operations on customer satisfaction and has emphasized a return to the basics in an effort to close the gap with Uber. Lyft has spent millions of dollars to lure drivers but has had a hard time…
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