Delta Airlines Stock Falls Premarket After Q4 Sales Guidance Miss: Retail Investors Skeptical

Shares of Delta Airlines fell nearly 5% in Thursday’s pre-market session as of 7:48 a.m. ET after the firm’s fourth-quarter sales guidance fell short of estimates.

Delta expects Q4 earnings per share (EPS) in the range of $1.60-$1.85 versus Wall Street estimates of $1.71. The airline expects revenue to increase by 2%-4% year-over-year (YoY) versus estimates of a 4.1% growth.

Meanwhile, Delta’s third-quarter results, too, fell short of analyst estimates. The firm recorded adjusted EPS of $1.50 compared to an estimated $1.52 while revenue came in at $14.59 billion versus an estimate of $14.67 billion.

The airline’s operating income declined 30% YoY to $1.397 billion but net income rose 15% YoY to $1.27 billion. CEO Ed Bastian said in prepared remarks that the firm expects its December quarter pre-tax profit to grow 30% YoY to $1.4 billion, “which would mark one of the most profitable fourth quarters in our history."

Delta also highlighted the direct revenue impact of the Crowdstrike-caused outage was approximately $380 million, primarily led by customer refunds for canceled flights and compensation in the form of cash and SkyMiles. The non-fuel expense impact was $170 million, mainly due to customer expense reimbursements and crew-related costs.  

President Glen Hauenstein said the firm expects improved trends to continue for the December quarter while bookings for the holiday period remain strong.  

For the full-year, the airline expects profits to be “around the midpoint” of its guided range of $6 to $7 a share, excluding the 45-cent hit from the technology outage.    

Following the announcement, retail sentiment on Stocktwits dipped into the ‘neutral’ territory from the ‘bullish’ zone a day ago.

Majority of Stocktwits users are expressing skepticism on the stock with one user criticizing Wall Street forecasts about the share price.

https://stocktwits.com/Gowingsgo/message/588524685 

Some believe the stock is likely to decline toward the $45 mark soon.

For updates and corrections email newsroom@stocktwits.com

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