United

Spirit

Olympic

Delta

Frontier

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<p class="has-drop-cap">Delta Air Lines (NYSE: DAL) reported <a href="https://tokenist.com/delta-air-lines-misses-revenue-expectations-in-q2-eps-in-line/" rel="dofollow" class="deco-link">mixed second-quarter results</a> and a disappointing third-quarter forecast on Thursday, sending shockwaves through the airline industry. The news comes as U.S. carriers grapple with excess capacity and pricing pressures, leading to a broad selloff in airline stocks.</p> 
<h3 id="delta-s-third-quarter-forecast-fell-short-of-wall-street-estimates">Delta’s Third-Quarter Forecast Fell Short of Wall Street Estimates</h3> 
<p>Delta Air Lines posted record second-quarter operating revenue of $16.7 billion, with adjusted operating revenue reaching $15.4 billion, slightly below analyst expectations of $15.47 billion. <br><br>The company’s adjusted earnings per share of $2.36 met expectations, while operating income stood at $2.3 billion with a 14.7% operating margin. Delta also reported strong cash flow, with $2.5 billion from operations and $1.3 billion in free cash flow.</p> 
<p>However, Delta’s third-quarter forecast fell short of Wall Street estimates. The airline projects <a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="dofollow" class="deco-link">earnings per share</a> between $1.70 and $2.00, below analyst expectations of $2.05. Revenue growth is anticipated to be 5% to 7% year-over-year, with an operating margin forecast of 11% to 13%. <br><br>The company cited several factors for the lower outlook, including discounting pressure in the low-end market, reduced transatlantic bookings due to travelers avoiding Paris during the Olympic Games, and increased non-fuel operating costs from moderated capacity growth.</p> 
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<h3 id="airline-stocks-face-turbulence-after-delta-s-q2-results">Airline Stocks Face Turbulence After Delta’s Q2 Results</h3> 
<p>The disappointing forecast from Delta triggered a broader selloff in airline stocks. As of 11:00 AM EDT on July 11, 2024, Delta shares were down 2.82% to $46.86. <br><br>United Airlines (NASDAQ: UAH) saw a more significant drop of 16.07% to $47.15, while American Airlines (NASDAQ: AAL) plummeted 40.69% to $11.15. Southwest Airlines (NYSE: LUV) also experienced a substantial decline, falling 27.80% to $27.63.</p> 
<p>Other carriers were not immune to the industry-wide turbulence. Spirit Airlines (NYSE: SAVE) and Frontier Group Holdings (NASDAQ: ULCC) have seen year-to-date declines of 83.33% and 60.13%, respectively. JetBlue Airways (NASDAQ: JBLU) is down 36.73% for the year. In contrast, SkyWest (NASDAQ: SKYW) has been a rare bright spot, posting a year-to-date gain of 100.60%.</p> 
<p>The airline industry is facing significant headwinds, with excess capacity undermining pricing power. Domestic seat capacity is up <a href="https://www.reuters.com/business/aerospace-defense/delta-earnings-outlook-weaker-than-wall-street-forecast-2024-07-11/" target="_blank" aria-label="6% year-over-year (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">6% year-over-year</a>, while average round-trip ticket prices in May were down 3% compared to the previous year. </p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em>s</p> 
<h3 id="br"><br></h3> 
<p>The post <a rel="nofollow" href="https://tokenist.com/airline-stocks-face-turbulence-after-delta-posts-weak-q3-guidance/">Airline Stocks Face Turbulence After Delta Posts Weak Q3 Guidance</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Airline Stocks Face Turbulence After Delta Posts Weak Q3 Guidance

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