Your Uber (profit) has arrived

Good news, Superheroes!

The RBA expects Aussie inflation to slow down to 4.1% by the end of the year, despite the ASX flatlining earlier in the week.

Amazon, Apple and Airbnb all beat earnings expectations this morning. Oh, and Pilbara made a roaring announcement about an innovative lithium product it’s developing to drive an all-new battery boom.

Let’s see what else happened this week.

Uber finally drives into the profit lane

Uber revved up its engine last quarter to report its first operating profit. Ever.

Analysts were expecting a marginal loss of 1c per share compared to the previous year. But the company surprised the markets with an 18c gain.

📖 A bit of backstory

Rideshare and food delivery disrupter Uber has been a loss-making business ever since Ubers started arriving in 2010.

Between the pandemic and cheap capital, Uber managed to fuel a hyper-competitive pricing and growth strategy to muscle out copycats and crush the taxi industry.

But it also burnt cash with projects that were aspirational at best, or vanity-driven at worst. Remember those Ubercopters and autonomous vehicles?

After controversial founding CEO Travis Kalanick saw a real “fare”-well over a string of scandals and internal culture issues, Uber found more self-discipline under a new driver.

In August 2017, Dara Khosrowshahi took the wheel to keep the company within its lane and navigate towards sustainable growth and profitability.

A gentle reminder that even the shiniest of cars can have bad drivers.

Amazon delivers a “Prime” profit performance

Amazon, the e-commerce juggernaut, delivered revenue marginally above expectations this morning. Key divisions like Amazon Web Services and Advertising helped post a blow-out profit. (The strongest earnings beat since the end of 2020.)

🤔 What’s the key driver?

The mighty engine of AWS continues to have an outsized impact on the performance of the entire business, with 70% of Amazon’s operating profit coming from AWS alone. For context, AWS’s revenue is only 16% of the group’s total revenue.

In addition to AWS’s dominance, Amazon’s aggressive cost-cutting measures are also starting to bear fruit for shareholders.

The company initiated the largest layoffs in its history, trimming over 27,000 jobs since last spring.

🔦 Some other things we’re shining the Spotlight on:

• A BIRKENBARBIE IPO: The 10-billion-dollar “ugly shoe” business, Birkenstock, is reportedly prepping for an initial public offering. The sandals and clogs have become an even bigger hit lately, thanks to a tickled-pink cameo in the Barbie flick and luxury brand collabs.
• BLOCKED: The ACCC has rejected ANZ’s $4.9 billion takeover of Suncorp’s bank this morning. The competition regulator wasn’t convinced the deal wouldn’t substantially reduce competition in the market. Suncorp investors seem disappointed, with shares down 2.3%.

📊 Upcoming ASX reports due:

• CBA’s FULL-YEAR PROFIT: Mark your calendars for Commonwealth Bank’s full-year profit release next Wednesday. There’s extra anticipation this time with the economy reaching a turning point. So expect an even higher level of scrutiny when the bank delivers its numbers.
• More earnings are expected from Suncorp, James Hardy, AGL, AMP, Boral, Baby Bunting, Newcrest and REA Group next week.

That wraps up another weekly Spotlight.

Thanks to all of you for being here and reading!