delta airlines (DAL) was prepared to report first-quarter earnings early Thursday after american airlines (AAL) unexpectedly warned of earnings, raising concerns about demand. DAL shares fell below a key level on Wednesday. AAL fell, dragging other airlines further down.
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Delta’s earnings report will kick off quarterly results for airlines and the broader travel industry.
As recession concerns refuse to fade, Delta Chief Executive Ed Bastian told Reuters on Wednesday that the airline is doubling down on the most profitable premium travel to fend off an economic downturn.
The airline plans to offer 15,000 more premium seats per day across its network this year compared to the pre-pandemic period. He declined to share any further details.
Delta Earnings
Dear All: Analysts polled by FactSet expect Delta to post earnings of 29 cents per share, up from a loss of $1.23 a year ago.
Revenue is seen rising nearly 36% to $12.675 billion. But that would mark the seventh straight quarter of slowing sales growth.
Results: Check back before the market opens on Thursday.
panorama: For all of 2023, Wall Street forecasts Delta earnings of $5.36 per share, an increase of approximately 68% over 2022. Analyst consensus points to a 10% revenue increase for the full year, as well as a free cash flow of $1,847 million.
That’s generally below Delta’s guidance. In January, Delta guided 2023 EPS of $5-$6, with the midpoint at $5.50. He also guided a 15-20% revenue increase and free cash flow of more than $2 billion.
DAL shares
Delta Air Lines shares fell 2.3%, or about 34, in today’s stock market.
American Airlines shares fell 9% and United Airlines shares sank nearly 6% to 41.69 on Wednesday. Both DAL and UAL shares remain well below their lower 50-day moving averages after falling in March. Now they are testing the 200 day lines.
AAL shares fell sharply below their 200-day line on Wednesday.
Airline stocks raise earnings outlook, but not enough
American Airlines raised its first-quarter earnings outlook on Wednesday but still fell short of consensus views.
The company now expects EPS between 1 and 5 cents for the quarter, above previous guidance for flat earnings versus the same quarter a year ago. The guide’s 3-cent midpoint was below the 5-cent forecast of analysts surveyed by FactSet. FactSet subsequently lowered its consensus number to 4 cents.
American also said it expects a 25.5% increase in its total revenue per available seat mile, in line with previous guidance.
In mid-March, ahead of earnings season, United Airlines warned about first-quarter earnings, raising concerns about demand.
The profit warning surprised the market. While companies in other sectors warned of recession risks, airlines forecast strong demand. Commercial air travel continues to recover after the Covid-19 pandemic.
Unlike United, Delta Air Lines in mid-March maintained its first-quarter outlook, saying demand for travel is strong and getting stronger.
On April 6, United Airlines said it had expanded its flights by 25% compared to last year, citing a “strong increase” in demand for travel outside the US.
The carrier reports for the first quarter on Tuesday night.
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