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Delta Air Lines anticipates an increase in earnings in the fourth quarter, driven by strong travel demand and robust bookings for the upcoming holidays. The company projects adjusted earnings of $1.60 to $1.85 per share, surpassing Wall Street estimates and exceeding the previous year’s earnings of $1.28 per share. Despite this positive outlook, Delta’s shares saw a more than 5% decline in premarket trading.
Revenue is expected to grow between 2% and 4% compared to the previous year, although slightly lower than the estimated 4.1% increase. The airline foresees a 1-point revenue decline due to reduced demand surrounding the U.S. presidential election. CEO Ed Bastian mentioned potential fluctuations around the election but highlighted strong holiday bookings.
In the third quarter, Delta’s performance slightly missed Wall Street expectations. Adjusted earnings per share were $1.50, below the $1.52 forecasted, while revenue amounted to $14.59 billion, slightly below the expected $14.67 billion.
The company also reiterated the impact of the CrowdStrike outage in July, resulting in a 45-cent decrease in adjusted earnings. Delta faced challenges in recovering from the outage, leading to thousands of flight cancellations and a $380 million revenue loss. Delta is actively seeking compensation from CrowdStrike and Microsoft for the disruption.
Despite these setbacks, Delta’s net income increased by 15% year-over-year to $1.27 billion, with total revenue rising by 1% to $15.68 billion. Premium offerings like first class outperformed the main cabin in terms of sales. The domestic market’s oversupply has held airfare prices down, but with industry supply growth stabilizing, Delta remains optimistic for the final quarter and beyond.
The airline plans to expand capacity by 3% to 4% in the fourth quarter and maintains its full-year adjusted earnings forecast between $6 to $7 per share, excluding the impact of the CrowdStrike incident.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.