New York-based office-sharing business WeWork has turned its first profit since its public listing in 2021 amid a recovery of its London office portfolio, but fell short of analyst estimates.
The firm said pre-tax earnings for the current quarter would be in the range of breakeven to a $25 million loss, a huge improvement from the $283 million loss it made a year ago.
But revenue for the three months to December came in at $848 million, below the $874 million estimated by City forecasters, according to Refinitiv data.
Sandeep Mathrani, CEO and Chairman of WeWork, said: “Our fourth quarter results demonstrate that we accomplished what we set out to do in fiscal year 2022 by staying focused on reducing expenses, optimizing our portfolio, growing revenue, and increasing occupancy.”
The firm said its London office operations showed strong signs of recovery over the past year, with occupancy rebounding to 81% at the end of last year compared with 63% a year prior.
WeWork said its sales in the three months to the end of December amounted to 44% of the total square feet freshly leased in the capital’s traditional office market, despite the fact that its London portfolio represented only 1% of the total office stock.
WeWork shares fell 6% to $1.63 in the minutes after the opening bell on Wall Street. The company has seen its share plunge some 77% over the past year after the Covid pandemic forced City employees to work from home amid lockdown restrictions, with many firms opting to downsize office space and encourage more flexible working after restrictions were lifted.
Last month, the business laid off 300 employees, representing around 7% of its workforce, as it sought to slash costs and convince shareholders of its strategy to return to profitability.
