The stock market has been on a roll to begin the week, but it appeared that Wall Street might take a pause on Wednesday from its recent bull run. An hour before the opening bell, futures on the Nasdaq Composite (^IXIC 0.55%) had fallen more than half a percent.
Yet even though the broader market indexes looked poised to start out the day on Wednesday lower, several stocks were sharply higher on company-specific news. In particular, both United Airlines Holdings (UAL 2.13%) and ASML Holding (ASML 1.23%) saw their stock prices rise following their latest financial reports, as shareholders gained confidence in the two companies' ability to weather an economic downturn and emerge stronger.
United heads for the skies
Shares of United Airlines were up nearly 6% in premarket trading on Wednesday morning. The airline giant reported strong third-quarter results late Tuesday that gave investors more reassurance that the company could recover fully from the impact the COVID-19 pandemic has had on its operations.
United's third-quarter numbers were much better than most had expected. Operating revenue soared more than 66% year over year to $12.88 billion, surpassing its pre-pandemic levels from 2019 by more than 13%. Despite substantial increases in fuel costs and aircraft maintenance materials, operating income jumped over 40% from year-ago levels and came within 1% of topping figures from the third quarter of 2019. Net income worked out to $942 million, or $2.86 per share.
Moreover, United is seeing headwinds turn into tailwinds for the airline industry. The company's total revenue per available seat-mile for September came in at its third-highest level in corporate history. On-time arrival rates and low misconnection rates were the best United has ever seen for this time of year.
Most importantly, United sees hybrid work, limits on building aircraft capacity, and air travel's recovery from the pandemic as lasting trends that should help the industry not just for the rest of 2022 but also in years to come. That has airline investors thinking the long period of despair for stocks in the industry could finally be coming to an end.
ASML keeps chipping away
Shares of ASML Holding also moved higher, rising nearly 5% in premarket trading. The semiconductor equipment specialist held up better than many had feared even as its industry shows signs of going through a cyclical downturn.
The Dutch company's third-quarter financial results showed steady performance. Sales of 5.78 billion euros were up more than 10% from year-ago levels. Net income slipped about 2% year over year to 1.7 billion euros, but thanks to a sizable reduction in share count, earnings actually inched higher nearly 1% to 4.29 euros per share for the quarter. ASML reported record net bookings activity during the period, clocking in at 8.9 billion euros.
Moreover, ASML sees the rest of 2022 going reasonably well. The semiconductor equipment maker set its fourth-quarter revenue guidance at between 6.1 billion and 6.6 billion euros, with gross margin potentially falling slightly but remaining healthy overall. ASML also expects that some demand for partially tested "fast shipment" products will take about 2.2 billion euros' worth of sales out of the 2022 fiscal year and instead push those sales into 2023.
ASML acknowledges that there's a considerable amount of uncertainty in the semiconductor market right now, as inflation, consumer confidence, and recessionary risks conspire to reduce visibility for the businesses ASML serves. Nevertheless, the equipment maker sees overall demand for its systems remaining strong, particularly among its most advanced manufacturing equipment. As long as the companies designing semiconductors need to turn their designs into actual chips for their end users, ASML should hold up well.