Shares of Delta Air Lines (NYSE: DAL) fell 2% on Friday. The stock has gained 17% over the past three months. The airline is scheduled to report its earnings results for the fourth quarter of 2024 on Friday, January 10, before markets open. Here’s a look at what to expect from the earnings report:
Revenue
Delta expects its revenues for the fourth quarter of 2024 to increase 2-4% year-over-year. Analysts are projecting revenues of $14.65 billion for Q4 2024, which represents a growth of around 3% YoY. In the third quarter of 2024, revenues inched up 1% to $15.67 billion.
Earnings
The airline expects earnings per share for Q4 2024 to range between $1.60-1.85. Analysts are forecasting EPS of $1.74, which compares to adjusted EPS of $1.28 reported in Q4 2023. In Q3 2024, adjusted EPS fell 26% YoY to $1.50.
Points to note
Delta’s fourth quarter performance is expected to have benefited from the record travel trends seen during the holiday season. Strong demand for leisure travel and continued improvement in business travel are expected to continue to yield benefits.
The company is expected to benefit from its revenue diversification. It is seeing a rise in demand for premium travel. In Q3, premium revenue growth outpaced main cabin in domestic and international. Loyalty revenue grew 6% YoY last quarter, with growth in SkyMiles membership and strength in the American Express co-brand portfolio. American Express remuneration grew 6% to $1.8 billion in Q3.
Delta has forecasted capacity growth of 3-4% for the December quarter. Fuel costs are expected to range between $2.20-2.40 per gallon, down over 20% YoY. Unit costs are expected to be up 3% from last year. Operating margin is expected to range between 11-13%.