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United Airlines stock rises amid earnings beat

Shares of United Airlines are moving higher in after-hours trading following the company's third-quarter earnings results.

Video Transcript

SEANA SMITH: But I want to switch gears here and look at United because this stock moving to the upside following its earnings beat here. You look at that. Shares up just around 4%. Revenue coming in at 12.9 billion. That was better than what the Street was looking for. Adjusted EPS, 2.81. The estimate on the Street was 2.29, so a beat there on both the top and bottom lines. Third quarter available seat miles coming in at 67.7 billion. Estimate out there was for 66.9 billion.

A couple of comments from United-- COVID recovery trend to overcome recessionary pressure. That's a bullish sign here for the company, as there was some fear that people would begin to pull back in spending because of the slowing economy. They also expect fourth quarter adjusted operating margin to exceed 2019 levels. So that beat on the top and bottom line, the bullish commentary there, Dave, from executives in this release really adding to the momentum that we're seeing after hours. Now the stock up nearly 6%.

DAVE BRIGGS: On top of what we saw from Delta Airlines just about a week ago, and I hate to be the bearer of bad news. But if you are the Fed chair and you're seeing these numbers, this is another inflationary story. This is not the news the Fed wants to see. This is not the news you want to see if you expect the Fed to pause-- not one bit.

You know why? Because airfares are up 8% month over month and a staggering 43% year over year. And yet, they're not seeing demand destruction? Rachelle, that's great news for United and for their shareholders. That is bad news in terms of the Fed story in this country.

RACHELLE AKUFFO: I mean, it really is. And we've been talking for a while about when we're going to start seeing this demand destruction. The prices are not going down. This is still not deterring people. We were saying, oh, perhaps this is the post-COVID buildup. We're now heading into the holiday season. Even when you look ahead to the next quarter, demand still not slowing down.

So I don't know what it's going to take for consumers to pull back on that spending. We're seeing them pull back in other areas, but not on this. And you have to factor in, obviously, they're paying these inflated prices. So obviously, it's going to be boosting airlines' profits. But the consumer not letting go.

DAVE BRIGGS: It strengthens the case that we need massive job losses in order to bring inflation down to even 4%, let alone the Fed's target of 2%. But certainly a solid report.