Wall Street seemed nervous once again on Tuesday morning, as the Dow Jones Industrial Average (^DJI -1.05%) and other major market benchmarks opened lower. With the next meeting of the Federal Reserve's Open Market Committee beginning its two-day meeting today, many investors wonder if the central bank will finally signal it's done raising short-term interest rates amid a possibly looming recession.
Yet earnings season continues to draw interest in certain companies that are finding ways to overcome macroeconomic pressures. Among Tuesday morning's winners, Uber Technologies (UBER -0.04%) and NXP Semiconductors (NXPI 0.82%) stood out. Take a closer look at what these two tech-savvy companies had to say and find out why investors are feeling better about the two stocks.
Uber gets into the fast lane
Shares of Uber Technologies were up 8% early Tuesday morning, adding to big gains from Monday. The ride-hailing and delivery specialist posted strong first-quarter financial results that showed that passengers are getting back to normal levels of ridership following years of pandemic-related sluggishness.
Uber's revenue grew 29% year over year to $8.8 billion, as gross bookings were higher by 19% from year-ago levels. In particular, the mobility segment saw extremely strong growth of 40% in gross bookings, driven by Uber's ride-hailing service. The delivery arena still had solid gains of 8%, with the two segments making roughly equal contributions to Uber's overall bookings. Trips climbed 24% to 2.1 billion for the quarter.
Uber was also pleased to see its favorite profitability measures rise. Adjusted pre-tax operating profits more than quadrupled to $761 million. Uber brought in $549 million in free cash flow during the quarter, reversing a modest outflow in the year-ago period.
Investors see huge promise in Uber's business, although the stock has struggled in recent years. With the company emerging from pandemic-related stresses, though, the stock might finally get a chance to shine.
NXP rides to a solid profit
Shares of NXP Semiconductors also performed well early Tuesday, climbing 5%. The semiconductor manufacturer saw sluggish performance on the sales front in the first quarter of 2023, but it was quite profitable even amid a cyclical downturn in some of its business segments.
NXP's results for the quarter were mixed. Revenue eased lower by 0.5% year over year to $3.12 billion. However, the chipmaker had substantial adjusted net income of $834 million, which worked out to $3.19 per share.
NXP has seen a fair amount of variation across its various business areas. The automotive segment continues to do well for the company, with revenue of $1.83 billion showing a 17% rise year over year. However, NXP's industrial and Internet of Things business saw a 26% drop in revenue as businesses pulled back from some of their capital investment in technological innovation. Similarly, spending in NXP's mobile segment was down 35% from year-ago levels.
CEO Kurt Sievers still maintained some caution in his comments, expressing optimism that NXP can work through macroeconomic pressures that have contributed to the downturn in its consumer-facing business segments. Yet with strength in automotive and industrial applications, NXP believes it can remain in a good position to take advantage of economic expansion when it returns once again.
