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Earnings Results: Uber’s stock revs higher after earnings bring surprise profit, upbeat outlook

Uber Technologies Inc. could be at the beginning of a stretch of sustained profitability as the ride-hailing giant posted surprise positive earnings for its latest quarter Tuesday.

The company logged second-quarter net income of $394 million, or 18 cents a share, whereas Uber UBER, +2.74% posted a net loss of $2.6 billion, or $1.33 a share in its year-earlier period. Analysts tracked by FactSet were expecting a 1-cent loss per share.

Analysts expect a string of GAAP profits beyond this quarter, a trend that excites analysts as it could ultimately help Uber win inclusion in the S&P 500.

Chief Financial Officer Nelson Chai teased in Uber’s prepared remarks that over the coming quarters, the company “will evaluate returning excess capital to shareholders as our cash flows ramp, and with any potential further monetization of our equity stakes over the long term.”

See also: Could Uber’s stock cruise to $70? Barclays thinks it can keep riding higher in a big way.

Uber’s shares were up about 4% in premarket trading Tuesday after roughly doubling so far this year.

Revenue rose to $9.23 billion from $8.07 billion, while analysts were modeling $9.34 billion. Uber generated $4.89 billion in revenue from its mobility business, up 38%, $3.06 billion from its delivery business, up 14%, and $1.28 billion from its freight business, down 30%.

The mobility business “continues to fire on all cylinders,” Chief Executive Dara Khosrowshahi said in prepared remarks posted to Uber’s corporate site. The company benefited from a “strong demand environment” while also seeing a 33% year-over-year bump in mobility active drivers, a measure of supply.

“Our path to growth is centered on our ability to grow supply, and our focus on driver growth over the last several years has resulted in a significantly improved consumer experience,” he said.

Gross bookings, which represent the dollar value of rides, delivery orders and other non-tip items flowing through the company’s platform, increased to $33.6 billion to $29.1 billion, essentially matching the FactSet consensus, which was for $33.5 billion.

Read: Uber’s stock gets another strong endorsement as Bernstein sees a path to $60

For the third quarter, Uber said it anticipates $34 billion to $35 billion in gross bookings, along with $975 million to $1.025 billion in adjusted earnings before interest, taxes, depreciation and amortization. The FactSet consensus was for $34.1 billion in gross bookings and $927 million in adjusted Ebitda.

The company disclosed in its release that Chai plans to leave the company effective Jan. 5. Uber is searching for his replacement.

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