Delta Airlines It expects earnings to grow in the fourth quarter, thanks to resilient travel demand and strong bookings for year-end holidays.
The Atlanta-based carrier on Thursday forecast fourth-quarter adjusted earnings of $1.60 to $1.85 per share, compared with a Wall Street estimate of $1.71, according to LSEG, and higher than the adjusted $1.28 per share it reported a year ago.
Revenues are likely to rise between 2% and 4% compared to the previous year, compared to estimates of a 4.1% increase. The carrier warned that it expects revenue to decline by one point due to lower demand before and after the US presidential election on November 5.
“We expect to see a little bit of volatility around the election, which is what we saw in the last national election,” CEO Ed Bastian said in an interview. “I think consumers are going to take some pause when making investment decisions, whether it's discretionary or other things. I think you'll hear other industries talking about that as well.”
He added that holiday bookings are very strong.
Here's how Delta performed in the third quarter, compared to Wall Street expectations based on consensus estimates from LSEG:
Earnings per share: $1.50, adjusted vs. $1.52 expected. Revenue: $14.59 billion, adjusted vs. $14.67 billion expected.
Delta reiterated that CrowdStrike's July outage amounted to 45 cents for adjusted earnings, which came in at $1.50 per share, just below analyst estimates. Delta struggled to recover after the outage, which took thousands of dollars Microsoft Windows devices went offline, prompting the airline to cancel thousands of flights. Delta said the incident resulted in a loss of $380 million in revenue.
Delta is seeking compensation from CrowdStrike and Microsoft for the outage, Bastian said.
“The devastation that has been done deserves, in my opinion, to be fully compensated for,” he told CNBC. “This matter is now in the hands of our attorneys. We hope to see a resolution but are keeping all our options open.”
However, Delta's net income rose 15% from a year earlier to $1.27 billion in the three months ended Sept. 30, with total revenue up 1% to $15.68 billion. Passenger revenues were flat compared to last year, but sales from premium offerings such as first class continued to outpace the main cabin.
Oversupply in the domestic market has capped airfare prices, but Delta President Glenn Hoenstine said the airline “supply growth in the industry continues to rationalize, positioning Delta well in the final quarter of the year and as we move into 2017.” 2025″. The carrier plans to expand capacity by 3% to 4% in the fourth quarter.
Delta said it still expects its full-year adjusted earnings to be between $6 and $7 per share, excluding the impact of CrowdStrike.
