Make jokes! Adding a zero to Lyft’s earnings outlook led to a sharp rise in the stock price and then retreated after clarification.

The share price of Lyft, an American online car company, soared 67% after hours. The company had previously predicted that the adjusted profit was 11% higher than the analyst’s forecast, and predicted that the profit margin would increase by 500 basis points in the initial press release. But the company later called the profit margin forecast a clerical error.

In a conference call with analysts, Erin Brewer, chief financial officer of Lyft, said that the company expected the profit margin to increase by 50 basis points instead of 500, and admitted that the figures in the press release were wrong. A company spokesman later called this a "clerical error" and said that the company had corrected this error in the documents submitted later.

After-hours share prices immediately retreated most of the gains. "This is an epic disaster," Wedbush Securities analyst Dan Ives said in an email. "I have never seen a mistake like this in my nearly 25 years of Wall Street career."

In fact, both Lyft and Uber released strong performance reports this quarter, indicating that the overall passenger demand continued to grow after a sharp decline nationwide during the epidemic. The two companies have invested huge sums of money to recruit and retain enough drivers to meet the surge in order demand. David Risher, CEO of Lyft, who took office less than a year ago, focused his operations on customer satisfaction and emphasized returning to the basics to narrow the gap with Uber. Lyft has spent millions of dollars to attract drivers, but it faces difficulties in increasing passengers.

Lyft said in a statement on Tuesday that the adjusted profit for the first three months of this year is expected to be as high as $55 million, exceeding analysts’ expectations of $49.5 million. The transaction volume of rides excluding tips will be between 3.5 billion and 3.6 billion US dollars, which is higher than the estimated 3.48 billion US dollars.

Lyft’s total orders in the fourth quarter increased by 17% year-on-year to $3.72 billion, higher than the forecast of $3.67 billion. Revenue increased by 4% year-on-year to $1.22 billion, in line with expectations.

Lyft said that the number of active users on its platform increased by 10% year-on-year to 22.4 million in the fourth quarter. Lyft had more than 40 million passengers last year, setting an annual record.

But Lyft still lags behind Uber. According to the data of market research company YipitData, since the second quarter of 2022, the company’s share in the American online car market is about 30%, while Uber’s is 70%. Uber announced its first annual profit since its IPO last week, and said that the number of trips in the quarter increased by 24% to 2.6 billion.

This article comes from: financial circles