Rheinmetall trims guidance while analysts lower targets for two companies
Uber Chief Executive Dara Khosrowshahi said the company expects to spend about $10 billion over the coming years to support its autonomous-vehicle ambitions.
“AVs represent a very important future for mobility,” Khosrowshahi said on CNBC. Uber has partnerships with more than 30 autonomous-vehicle companies spanning software, technology and vehicles, he said. The company plans to operate autonomous vehicles in 15 markets across the world by the end of the year.
Uber reported second-quarter revenue of $14.19 billion, up 12% from a year earlier. The result was slightly below Wall Street models of $14.24 billion. Khosrowshahi attributed the shortfall to a change in how Uber accounts for revenue in the U.K. and said, “so I wouldn’t call that a fundamental issue in any way.”
Gross bookings increased 24% to $58.02 billion, while adjusted earnings reached 81 cents a share. Both figures exceeded analyst expectations, according to FactSet. Uber shares were down 4% in early trading.
Khosrowshahi said consumer spending remained healthy. “We’re not seeing any signs of trade down, we’re not seeing smaller basket sizes,” he said. “Consumers remain generous in their tipping, for example. Sometimes if someone is feeling pinched at the pocket they might pull back on tipping, but none of that is happening.”
Khosrowshahi also cited increased earnings among Uber’s drivers in the latest quarter as evidence that labor markets remained strong. Uber cut prices across its mobility business in several markets as insurance costs declined, he said. California was among the affected markets, and Khosrowshahi said the lower prices had driven more business.
“We’ve seen an acceleration in terms of bookings in those markets,” Khosrowshahi said. He added that Uber grew both its mobility and delivery businesses in the U.S. during the latest quarter.
Rheinmetall lowered its annual sales guidance after its second-quarter results. The German arms maker now expects sales of between 13.7 billion euros and 14.2 billion euros, compared with its previous range of 14 billion euros to 14.5 billion euros.
The company reduced its capital-expenditure guidance to between 8% and 9% of sales, from 16% of sales. Rheinmetall now expects its backlog to exceed 100 billion euros this year, compared with an earlier expectation of around 135 billion euros.
JPMorgan analysts wrote that the results left investors with a lot to take in after Rheinmetall lowered its sales, capital-expenditure and backlog guidance. The company’s shares traded 0.2% higher at 1,203.40 euros.
Jens-Peter Rieck of MWB Research said Rheinmetall had halved its capital expenditure for the year because of changing priorities involving recently announced eastern European energetic production sites. Rieck said the company was likely shifting the canceled capital expenditure into 2027 and raised his capital-expenditure forecasts.
Rieck lowered his sales forecasts for 2028 and beyond, citing shifting German procurement priorities that could weigh on Rheinmetall. He cut his price target to 1,050 euros from 1,150 euros and downgraded the stock to sell from hold.
In Australia, toll-road operator Transurban retained a trim rating at Morgans. Analyst Nathan Lead said he largely agreed with Transurban’s assessment that toll overhauls in New South Wales would be value neutral.
Lead said earnings growth could be constrained by weakness in Transurban’s Melbourne assets and that interest costs could rise faster than consensus expects. He said dividends could grow at a rate similar to those at pipeline operator APA.
Lead also said a rerating to APA’s yield would value Transurban’s stock at about 12 Australian dollars. Morgans cut its target price by 0.9% to A$12.63, while Transurban shares closed 0.75% lower at A$14.59.