Ride-hailing platform Lyft Inc. experienced a surge in share value and quickly settled with solid gains after issuing a correction to its profit forecast during its earnings call. The company had initially forecasted adjusted Ebitda margin expansion of around 500 basis points, but Chief Financial Officer Erin Brewer clarified during the call that the correct figure was 50 basis points.

The correction caused Lyft's shares to balloon in value, reaching a peak of over 60% higher at one point. However, the shares subsequently contracted and settled at a still-considerable gain of around 18%.

Despite the correction, Lyft remains optimistic about its performance in the year ahead. Prior to the earnings call, the company stated that it expected two key demand metrics to surpass Wall Street's expectations, as well as achieving positive free cash flow for the first time. These forecasts are a result of cost-cutting measures implemented over the past two years and efforts to manage insurance and other expenses effectively.

The rebound in the ride-sharing industry has also benefited Lyft's larger rival, Uber Technologies Inc. Uber projected percentage growth in rides in the mid-teens for the year, surpassing FactSet forecasts of around 11%. The company also anticipated an increase in gross bookings that slightly exceeded the growth in rides, with FactSet predicting bookings growth of approximately 12%.

For the first quarter, Lyft anticipates gross bookings to range between $3.5 billion and $3.6 billion, surpassing FactSet's estimate of $3.46 billion. Lyft CEO David Risher revealed that commute rides witnessed a substantial 27% increase during the previous quarter. He highlighted the importance of the segment catering to employees at companies like Starbucks Corp., which accounts for over 20% of Lyft's annual rides. Risher affirmed a renewed focus on bigger corporate customers and expressed enthusiasm regarding the potential of this segment.

Lyft's quarterly financial results followed Uber's fourth-quarter earnings report, which exceeded expectations. Uber's profitability, growth in subscriber numbers, and expanding ad business were praised by analysts. However, BofA analysts cautioned that Uber's intentions to "keep a lid" on prices could intensify competition with Lyft. Both companies are also grappling with higher insurance costs. Nonetheless, Lyft stated that it has not changed its pricing strategy in response to Uber's moves.

During the fourth quarter, Lyft reported a net loss of $26.3 million, significantly lower than the loss of $588.1 million in the same period the previous year. Adjusted earnings per share for Lyft came in at 18 cents, surpassing FactSet's estimate of 8 cents. Sales increased by 4% to $1.22 billion, aligning closely with estimates, while gross bookings rose 17% to $3.72 billion, exceeding expectations.

Over the past 12 months, Lyft's shares have seen a rise of 12.4%, while the S&P 500 index has grown by 19.1% during the same period. Despite the correction, Lyft's solid gains and positive outlook indicate that it is well-positioned to capitalize on the rebounding ride-sharing industry.