Wall Street braced for a modest decline Wednesday morning, with stock index futures suggesting a likely drop of up to half a percent for major benchmarks. Investors are still uncertain about the macroeconomic environment and its likely impact on capital markets, and it'll take a while for things to play out and bring more clarity.
In the meantime, individual companies are giving their latest financial results, and a pair of stocks in particular got a nice boost Wednesday morning. Both Uber Technologies (UBER 2.64%) and New Relic (NEWR) have been under pressure for a long time, and their share prices are far below their best historical levels. Yet both stocks moved higher after they released encouraging quarterly reports. Read on to learn the details and see whether Uber and New Relic could keep rising from here.
Uber drives higher
Shares of Uber Technologies were up 8% in premarket trading just before the open. The ride-sharing company is finally starting to see demand pick up after years of disruptions from the COVID-19 pandemic.
Uber's fourth-quarter results showed a 49% jump in revenue to $8.6 billion. Gross bookings climbed 19% year over year, with the ride-hailing mobility segment seeing an even steeper 31% growth rate. Despite the delivery segment seeing some normalization as the severity of the pandemic has waned, gross bookings there were still up 6% year over year. Adjusted pre-tax operating earnings soared close to eightfold.
Uber's fundamentals also looked better. The company reported 131 million monthly active platform users, up 11% from year-ago levels. Total trips exceeded 2.1 billion, compared to just 1.77 billion in the same period 12 months ago. Moreover, the company's acquisition of Transplace gives it new exposure to freight transport, which contributed a small but fast-growing boost to overall sales.
Furthermore, Uber sees positive momentum continuing to build. For the first quarter of 2023, the company expects gross billings growth of between 20% and 24%. Adjusted pre-tax operating earnings should stay stable in a range of $660 million to $700 million. For shareholders who've been disappointed with Uber's performance since it came public in 2019, signs are finally pointing in the right direction.
New Relic gets back in the race
Shares of New Relic did even better, jumping more than 20% early Wednesday. The provider of data analytics software reported fiscal third-quarter results for the period ending Dec. 31, and shareholders were pleased with the progress they saw from the company.
New Relic posted an 18% rise in revenue year over year, with sales coming in at $240 million. Gross margin levels improved markedly, jumping more than 9 percentage points on an adjusted basis to 77.6%. That, in turn, helped New Relic's bottom line, and the company said adjusted earnings were $0.32 per share for the period, reversing the prior-year period's $0.18-per-share loss.
Investors also praised New Relic's outlook for the first three months of 2023. Fiscal fourth-quarter projections included calls for sales of between $240 million and $242 million, which would represent gains of about 17% year over year. It also expects to remain profitable, projecting adjusted earnings of $0.20 to $0.23 per share.
Numerous software-as-a-service stocks have seen poor performance over the past year after bear market conditions hit the industry hard. Yet New Relic has managed to generate more stable growth, having avoided the excesses that many companies saw in 2020 and 2021 and therefore remaining in a better position to deliver in 2023 and beyond.
