Delta Air Lines DAL is scheduled to report third-quarter 2024 results on Oct. 10, before market open.
In the September quarter, the heavyweight airline is expected to have registered a 23.2% year-over-year decline with respect to the bottom line. DAL is expected to have registered a 1.72% year-over-year increase with respect to the top line.
The Zacks Consensus Estimate for third-quarter 2024 earnings, currently pegged at $1.56 per share, has been revised 14.3% downward in the past 60 days.
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The Zacks Consensus Estimate for third-quarter 2024 revenues is currently pegged at $15.76 billion. DAL has an impressive earnings surprise history, surpassing the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 9.9%.
Given this backdrop, let’s examine the factors which might have influenced Delta Air Lines’ performance in the to-be-reported quarter.
We expect upbeat passenger volumes to have boosted DAL’s top-line performance in the September quarter. Notably, the majority of passenger revenues are likely to have come from domestic markets. Declining oil prices (down 14% in the July-September period) are expected to have aided the bottom line. DAL expects fuel price per gallon in the September quarter to be less than $2.60. Our estimate is currently pegged at $2.57 per gallon.
High labor costs are likely to have hurt the bottom line. Non-fuel unit cost or cost per available seat mile (CASM: adjusted) for the September quarter is expected to have increased 5.5% from third-quarter 2023 level.
DAL’s results are likely to be impacted greatly by the global IT outage on July 19, 2024, that resulted in multiple flight cancelations. Delta had the hardest hit and recovered only recently. Per CEO Ed Bastian, the outage cost DAL approximately $500 million in the course of five days. DAL not only had to refund tickets for the canceled flights but also had to spend significantly on hotel accommodations and other compensation for its customers impacted by the outage. According to the CEO, the severity of the impact left DAL with “no choice" but to seek outage-related damages.
The outage, expected to hurt DAL's third-quarter earnings by 45 cents, was caused by a CrowdStrike CRWD software update. CrowdStrike is a security software provider.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Delta Air Lines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Delta Air Lines has an Earnings ESP of -0.32% and a Zacks Rank #3.
Highlights of DAL’s Second Quarter
Delta reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
An Airline Stock to Consider
Here is an airline stock that investors may consider, as our model shows that this has the right combination of elements to beat estimates in third-quarter 2024 earnings.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
United Airlines UAL has an Earnings ESP of +6.08% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
UAL is scheduled to report third-quarter 2024 earnings on Oct. 15. Its third-quarter results are likely to be aided by high passenger revenues. Escalated labor costs are expected to have hurt bottom-line performance in the September quarter.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
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Today, See These 5 Potential Home Runs >>Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
