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