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Lyft misses quarterly revenue estimates on competition, weak US travel demand

Lyft missed its second-quarter revenue forecasts on Wednesday due to mounting competition from Uber, and a softening of travel demand in the United States. This sent its shares down by 7% after-hours.

Uber Technologies, a larger rival that offers food and grocery deliveries, ride-hailing services, and other global business, beat revenue expectations and released an optimistic forecast for the third quarter earlier in the day.

Travel to the U.S. is down this year. Analysts expect that trend to continue until 2025, as trade tensions, economic uncertainty and visa delays make the country less attractive to foreign visitors.

According to data compiled and analyzed by LSEG, Lyft's revenue in the second quarter was $1.59 billion. This is below estimates of $1.61 million.

Visible Alpha surveyed 27 analysts and found that rides on the platform increased by 14%, reaching a new record of 234.8 millions, which is slightly less than estimates of 235.9 millions.

Lyft has recently acquired European mobility platform FreeNow for nearly $200 million. It also signed a contract with China's Baidu in order to introduce robotaxis from the search engine giant.

Uber, which boasts 20 global partnerships in self-driving technologies, has said that it is in discussions with banks and private equity firms to finance the deployment robotaxis.

Lyft announced Wednesday a partnership with United Airlines, which will launch later this summer. This partnership allows the airline's customers earn rewards for all Lyft trips.

Lyft’s entry into Europe, which includes partnerships with DoorDash and Chase, positions the company for further collaborations in international markets.

Lyft expects its gross bookings for the third quarter to be between $4.65 and $4.80 Billion, which is well above expectations of $4.59 Billion.

Analysts had expected 4 cents. The company reported a profit of 10 cents for the quarter ending June, which is more than twice that.

Ride-hailing services are turning their attention to smaller and medium-sized cities that are dependent on cars to expand and increase revenue.

Lyft reported a core adjusted earnings of $129.4 millions in the second quarter. This was above the average expectation of $124.5.

It predicted current-quarter core profits of $125 to $145 millions, which is largely in line Wall Street estimates. (Reporting from Akash Sriram, Bengaluru. Editing by Sriraj Kulluvila.)

(source: Reuters)