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Buyback follows Engine Capital's proposal for strategic

alternatives

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Lyft's ( LYFT ) Q1 revenue slightly misses expectations

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Company targets smaller, car-dependent cities for growth

May 8 (Reuters) - Lyft ( LYFT ) increased its stock

buyback program to $750 million and posted a 14% rise in

first-quarter revenue on Thursday, signaling steady demand for

its ride-hailing services.

The company, which is expanding beyond major U.S. cities

into smaller markets, said it intends to use $500 million of the

authorization within the next 12 months. It disclosed its first

share repurchase program in February, but did not specify a

timeline.

Last week, activist investor Engine Capital urged Lyft ( LYFT ) to

undertake a $750 million accelerated repurchase and said it

wanted the company to consider strategic alternatives, including

a sale.

The ride-hailing platform forecast second-quarter gross

bookings and adjusted core profit largely in line with analysts'

estimates.

Its first-quarter revenue of $1.45 billion, however, was

slightly below analysts' average estimate of $1.47 billion,

according to data compiled by LSEG.

The company posted adjusted core earnings of $106.5 million

during the first quarter, above the estimate of $92.4 million.

Larger rival Uber ( UBER ), with a global food and grocery

delivery business, offered an upbeat second-quarter forecast on

Wednesday, but attributed its lower-than-expected first-quarter

revenue to sluggish U.S. travel demand.

U.S. spending on both lodging and tourism-related activity

in March was down about 2.5%, according to Bank of America data,

signaling souring consumer sentiment amid economic volatility.

With growth rates stagnating in major U.S. metropolitan

areas, ride-hailing companies are increasingly focusing their

expansion efforts on less densely populated cities with limited

public transport options to capture new markets and drive

growth.

Lyft ( LYFT ) is targeting smaller, car-dependent markets such as

Indianapolis, where rides grew 37% in the first quarter.

The company expects gross bookings between $4.41 billion and

$4.57 billion for the second quarter, compared with the estimate

of $4.5 billion.

It forecast current-quarter adjusted earnings before

interest, tax, depreciation and amortization at $115 million to

$130 million.