A Delta Air Lines aircraft in an Atlanta airline hangar
Leslie Josephs/CNBC
Delta Air Lines Fourth-quarter revenue is expected to grow on strong travel demand and strong year-end vacation bookings.
The Atlanta-based airline on Thursday forecast fourth-quarter adjusted earnings of $1.60 to $1.85 a share, while Wall Street expected $1.71, also higher than the adjusted earnings reported a year ago, according to LSEG. Earnings per share were $1.28.
Delta Air Lines shares fell more than 5% in premarket trading.
Although the airline warned that it expected revenue to fall by 1 percentage point due to lower demand around the Nov. 5 U.S. presidential election, revenue could rise 2% to 4% from a year earlier.
“We do expect some volatility from the election, like we’ve seen in past national elections,” Chief Executive Ed Bastian said in an interview. “I think consumers will be a little bit hesitant to make investment decisions. Whether it’s discretionary or otherwise, I think you’ll hear that from other industries as well.”
Holiday bookings have been very strong, he added.
Here’s a look at Delta’s third-quarter performance, compared with Wall Street expectations based on the London Stock Exchange Group consensus forecast:
- Earnings per share: Adjusted $1.50, expected $1.52
- income: Adjusted $14.59 billion, expected $14.67 billion
Delta reiterated that July’s CrowdStrike outage caused adjusted earnings to fall 45 cents to $1.50 a share, slightly below analysts’ expectations. Delta airlines struggles to recover after blackout leaves thousands dead Microsoft Windows machines went offline and prompted airlines to cancel thousands of flights. Delta Air Lines said the incident resulted in $380 million in lost revenue.
Bastian said Delta is seeking compensation from CrowdStrike and Microsoft for the outage.
“I believe that the damage done should be fully compensated,” he told CNBC. “This matter is now in the hands of our lawyers. We hope to find a resolution, but we reserve all options.”
Despite this, in the three months ended September 30, Delta Air Lines’ net profit still increased by 15% from the same period last year, to US$1.27 billion, and total revenue increased by 1%, to US$15.68 billion. Passenger revenue remains stable compared with last year, but sales of premium products such as first class continue to outsell main cabin.
Oversupply in the domestic market has capped ticket prices, but Delta President Glen Hauenstein said the airline’s “industry supply growth continues to rationalize, putting Delta in a strong position heading into the final quarter of the year and into 2025.” The airline It plans to expand capacity by 3% to 4% in the fourth quarter.
Delta Air Lines said it expects full-year adjusted earnings to be between $6 and $7 per share, excluding the impact of CrowdStrike.
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