Delta Stock Rises on 'Strong' Second-Quarter Outlook and Confidence in Full-Year Guid | DAL Message Board Posts


Delta Air Lines Inc.

  DAL website

DAL   /  Message Board  /  Read Message

 

 






Keyword
Subject
Between
and
Rec'd By
Authored By
Minimum Recs
  
Previous Message  Next Message    Post Message    Post a Reply return to message boardtop of board
Msg  74 of 82  at  4/13/2023 11:42:40 AM  by

jerrykrause


Delta Stock Rises on 'Strong' Second-Quarter Outlook and Confidence in Full-Year Guid

Delta Stock Rises on 'Strong' Second-Quarter Outlook and Confidence in Full-Year Guidance
 

Shares of Delta Air Lines were rising Thursday after the carrier said the outlook for its second quarter was "strong."

Delta (ticker: DAL) rose 3.2% in premarket trading. The company missed expectations for adjusted earnings in the first three months of the year, reporting 25 cents a share compared with expectations of 29 cents. Revenue was $12.8 billion. Adjusted revenue, Delta said, was $11.8 billion. Analysts expected $12 billion.

"With solid March quarter profitability and a strong outlook for the June quarter, we are confident in our full-year guidance for revenue growth of 15% to 20% year over year, earnings of $5 to $6 per share and free cash flow of over $2 billion," said Ed Bastian, Delta's chief executive officer.

Delta is the first major carrier to report this season. The results and guidance are likely to shape sentiment toward the sector over the days ahead.

Analysts covering the stock also see positive second and third quarters for Delta, with EPS estimates suggesting double-digit increases on the same quarters in 2022. Current third-quarter estimates have EPS 24% higher than the previous year.

Delta said it sees second-quarter operating margin at 14% to 16%, and full-year margins at 10% to 12%. The company said second-quarter earnings should come in at $2 to $2.25 a share, compared with analysts' estimates of $1.66. Full-year profit is seen between $5 and $6 a share, in line with expectations of $5.36.

After an impressive start to 2023, airline stocks have moved lower in the past month or so as a number of factors, including the regional banking turmoil and higher oil prices, hurt sentiment. The NYSE Arca Global Airline Index rose more than 16% in the first three months of 2023 but has fallen 7.5% since then.

But the spring and summer months are historically good for airlines, and demand this year looks punchy –United Airlines said last week that international bookings were up 15% in March compared with the year-ago period.

Earnings season is an opportunity for carriers to show investors whether a bumper summer travel period is around the corner. Any signs of weakening demand, and that economic conditions and elevated airfares are finally weighing on consumers' desire to travel, could ensure the stocks remain grounded at current levels, or lower.

"It is important to contextualize the first quarter as it is historically the least important quarter for the airlines (13% of annual earnings pre-pandemic)," Melius Research analyst Conor Cunningham said. "Although results for the first quarter 2023 will be choppy, commentary on spring and summer travel is key to 2023," he added.

Therefore second quarter forecasts, as well as full-year guidance, will likely pique the market's interest. A number of other factors, including labor costs and pilot pay deals, as well as the impact of fuel prices, will also be closely watched.

American Airlines (AAL) appeared to knock confidence in the sector Wednesday despite raising its profit guidance for the first quarter. The company's new outlook for adjusted earnings per share of 1 cent to 5 cents fell short of analysts' expectations. The carrier's update didn't include any color on prospects further ahead, which will be crucial in determining the path of airline stocks this earnings season.

 


     e-mail to a friend      printer-friendly     add to library      
|  
Recs: 2  
   Views: 0 []
Previous Message  Next Message    Post Message    Post a Reply return to message boardtop of board




Financial Market Data provided by
.
Loading...