#DeltaAirLines #Q3Earnings #TravelDemand
Delta Air Lines Posts Strong Q3 Earnings and Optimistic Q4 Forecast
Delta Air Lines ($DAL) has released its third-quarter 2024 earnings, showcasing a resilient performance despite recent challenges. Here are the key highlights and what they mean for the airline's future.
Earnings and Revenue
Delta reported adjusted earnings per share of $1.50 for the third quarter, slightly below the anticipated $1.52. Adjusted revenue stood at $14.59 billion, compared to the expected $14.67 billion. Despite these minor misses, Delta's net income increased by 15% year-over-year, reaching $1.27 billion for the quarter ending September 30. Overall revenue rose by 1% to $15.68 billion.
Impact of the CrowdStrike Outage
The CrowdStrike outage in July had a significant impact on Delta's operations, resulting in a 45-cent hit on adjusted earnings per share and a $380 million revenue loss. This incident took numerous Microsoft Windows machines offline and led to the cancellation of thousands of flights. Delta is now pursuing compensation from CrowdStrike and Microsoft, with CEO Ed Bastian stating that the airline deserves to be fully compensated for the losses incurred.
Strong Holiday Bookings and Future Outlook
Delta is optimistic about its fourth-quarter performance, driven by robust travel demand and strong holiday season bookings. The airline forecasts adjusted earnings for the fourth quarter to be between $1.60 and $1.85 per share, surpassing Wall Street's expectations of $1.71. This forecast is supported by a projected revenue growth of approximately 2% to 4% compared to last year, although Delta cautions about a potential 1-point revenue decline due to reduced demand surrounding the U.S. presidential election on November 5.
Industry Trends and Capacity Plans
Despite the domestic market being oversupplied, which has kept airfare in check, Delta's president, Glen Hauenstein, noted that the industry's supply growth is stabilizing. This positions Delta favorably for the final quarter of the year and into 2025. The airline plans to increase its capacity by 3% to 4% in the fourth quarter, reflecting its confidence in future demand.
Premium Services Performance
Delta's sales from premium services, such as first class, continued to exceed those from the main cabin, indicating a strong demand for high-end travel options. This trend is expected to continue, contributing to Delta's overall revenue growth.
In summary, Delta Air Lines has demonstrated its ability to navigate challenges and maintain a strong financial performance. With robust holiday bookings and an optimistic outlook for the fourth quarter, Delta is well-positioned for continued success in the aviation industry.
Original Article: https://www.cnbc.com/2024/10/10/delta-air-lines-dal-3q-2024-earnings.html
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