Ride-hailing leader, Lyft’s stock price soared today on hopes that the company could finally become profitable. Lyft executives said profits were on the horizon partly because it slashed $360 million in fixed costs last year amid the COVID-19 crisis.
Shares for Lyft jumped about 11 percent to $59.40 in premarket trading after executives said there’s a chance the company could turn its first profit in the third quarter of 2021.
The Silicon Valley firm also expects demand for rides to start bouncing back in the spring and summer as vaccines are rolled out.
“Obviously, pulling in profitability would require a strong summer rebound,” chief financial officer Brian Roberts said on a call with investors. “However, the fact that this is now even a possibility in the Q3 time frame should increase investor confidence.”
Lyft’s business has gradually improved since its ridership plunged last spring amid nationwide lockdowns sparked by the coronavirus pandemic.
Lyft raked in revenues of about $570 million from October through December, down 44 percent from the year-earlier period but up 14 percent from the July-to-September quarter.
“Despite the difficult backdrop in 2020, we continued to focus on improving our business for the long-term,” Lyft CEO Logan Green said in a statement. “The progress we’ve made has been significant and I believe we are now in a stronger position than at any time in our past.”
