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Earnings preview: Fuel price worries Delta despite record services

Airline companies are set to report earnings this week, beginning with Delta Air Lines (DAL) on Thursday. The industry, as a whole, has been suffering from rising fuel costs, despite seeing an increase in passenger influx. Fuel price inflation had earlier forced Delta to reduce its guidance for Q2 EPS and pre-tax margin. Delta is […]

July 10, 2018 2 min read
AlphaGraphs

Airline companies are set to report earnings this week, beginning with Delta Air Lines (DAL) on Thursday. The industry, as a whole, has been suffering from rising fuel costs, despite seeing an increase in passenger influx. Fuel price inflation had earlier forced Delta to reduce its guidance for Q2 EPS and pre-tax margin. Delta is […]

· July 10, 2018

Airline companies are set to report earnings this week, beginning with Delta Air Lines (DAL) on Thursday. The industry, as a whole, has been suffering from rising fuel costs, despite seeing an increase in passenger influx. Fuel price inflation had earlier forced Delta to reduce its guidance for Q2 EPS and pre-tax margin.

Delta is slated to report its Q2 earnings on July 12 before the opening bell. In April, the Atlanta-based company had said that it expected pre-tax margin of about 14- 16% and EPS of $1.80 – $2.00 in Q2. But since fuel costs have almost suged 60% compared to last year,

the company now expects pre-tax margin of 13-14% and EPS of $1.65 – $1.75.

Meanwhile, analysts expect Delta to report earnings of $1.72 per share on an earning growth of 8% to $11.67 billion. For Q2, the airline company expects its revenue per available seat mile to grow between 4-5%.

As of Tuesday, the stock is trading up 1.86% at $50.51. Ten out of 11 analysts covering the stock has a BUY rating, with the eleventh one has given HOLD.

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Traffic report for June:

In June, Delta flew a record 17.7 million passengers, with June 29 being the second busiest day in its history after June 30, 2017.  The company’s revenue passenger miles (RPMs), came in at 21.45 million, up 3% year-over-year. Consolidated capacity or available seat miles (ASM) also inched up 3% to 24.23 million. Load factor remained flat at 88.5%.

Delta Q1 results (click to enlarge)

Delta Air Lines reported better than expected Q1 2018 earnings, despite rising costs

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