Shares of Delta Airlines (DAL) slid in pre-market trading after the airline major’s fourth-quarter guidance left investors disappointed. The company anticipates its revenues increasing from 2% to 4% year-over-year in the fourth quarter, slightly below estimates of growth of 4.1%. Furthermore, DAL warned that it expects its unit revenue to take a hit of one point due to lowered travel demand around the time of the U.S. Presidential elections.
Additionally, the company expects its fourth-quarter adjusted earnings to be in the range of $1.60 to $1.85 per share. At the low end of this range, this forecast was below Wall Street estimates of $1.71 per share.
DAL’s Q3 Results Fall Short of Estimates
When it comes to the airline’s third-quarter results, DAL posted adjusted operating revenues of $14.59 billion, inching higher by 0.3% year-over-year. Analysts were expecting revenues of $14.65 billion. Furthermore, DAL’s adjusted earnings dropped by 26% year-over-year to $1.50 per share, missing Street estimates of $1.52 per share.
DAL Takes a Hit Due to the Crowdstrike Outage
Moreover, DAL’s revenues in the third quarter took a hit of $380 million due to the outage caused by a software update by global cybersecurity firm CrowdStrike (CRWD) that caused system problems. Delta’s CEO Ed Bastian told CNBC that the airline was seeking compensation from the company for the outage. Bastian commented, “The havoc that was created deserves, in my opinion, to be fully compensated for. This matter is now in the hands of our attorneys.”
Is DAL Stock a Buy?
Analysts remain bullish about DAL stock, with a Strong Buy consensus rating based on a unanimous 14 Buys. Over the past year, DAL has increased by more than 40%, and the average DAL price target of $61.69 implies an upside potential of 21.01% from current levels. These analyst ratings are likely to change following DAL’s results today.
