Delta Air Lines expects fourth-quarter profit growth because of robust travel demand and robust year-end leisure bookings.
The Atlanta-based airline on Thursday forecast fourth-quarter adjusted earnings of $1.60 to $1.85 per share, compared with Wall Street estimates of $1.71, in response to LSEG, and above the adjusted $1. $28 per share, which it reported a 12 months earlier.
Sales are expected to extend by 2 to 4% in comparison with the previous 12 months, with estimates suggesting a rise of 4.1%. The airline warned that it expected a one percentage point drop in revenue because of lower demand before and after the US presidential election on November 5.
“We expect the election to be somewhat choppy, as we have seen in previous national elections,” CEO Ed Bastian said in an interview. “Consumers, I think, will take a little pause when making investment decisions, whether for discretionary reasons or for other reasons. I think you’ll hear other industries talking about this too.”
He added that vacation bookings were very strong.
Here's Delta's third-quarter performance in comparison with Wall Street expectations based on LSEG consensus estimates:
- Earnings per share: $1.50 adjusted vs. $1.52 expected
- Revenue: $14.59 billion adjusted vs. $14.67 billion expected
Delta reiterated that the CrowdStrike outage meant a forty five cent drop in adjusted earnings in July, which got here in at $1.50 per share, barely below analyst estimates. Delta struggled to get well from the outage that left hundreds of individuals dead Microsoft Windows machines were offline, causing the airline to cancel hundreds of flights. The incident reduced revenue by $380 million, Delta said.
Bastian said Delta is looking for compensation from CrowdStrike and Microsoft for the outage.
“The chaos that has been created deserves, in my opinion, full compensation,” he told CNBC. “This matter is now in the hands of our lawyers. We hope we can find a solution, but we are keeping all options open.”
Still, Delta's net profit rose 15% year-on-year to $1.27 billion within the three months ended Sept. 30, while total revenue rose 1% to $15.68 billion. Passenger revenue remained stable in comparison with last 12 months, but revenue from premium offerings similar to top notch continued to exceed most important cabin revenue.
An oversupplied domestic market had kept airfares under control, but Delta President Glen Hauenstein said the airline “continues to rationalize growth in industry offerings, positioning Delta well in the final quarter of the year and heading into 2025.” plans to expand capability by 3 to 4 percent within 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.
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