Delta Air Lines (DAL) Q3 2024 Earnings

Delta Airlines expects to increase profits in the fourth quarter, thanks to resilient travel demand and strong bookings for the year-end holidays.

The Atlanta-based airline on Thursday forecast adjusted fourth-quarter earnings of between $1.60 and $1.85 per share, compared with Wall Street estimates of $1.71, according to LSEG, and above estimates. adjusted $1.28 per share it reported a year earlier.

Revenue is likely to rise 2% to 4% from a year ago, compared with estimates of a 4.1% increase. The airline warned that it expects a 1-point hit to its revenue due to lower demand before and after the US presidential election on November 5.

“We anticipate seeing some turmoil around the election, as we’ve seen in past national elections,” CEO Ed Bastian said in an interview. “I think consumers will take a little pause when it comes to making investment decisions, whether they’re discretionary or other things. I think you’ll hear other industries talking about that, too.”

He added that vacation bookings are very strong.

Here’s how Delta performed in the third quarter, compared to Wall Street expectations based on LSEG consensus estimates:

• Earnings per share: $1.50 adjusted vs. $1.52 expected
• Revenue: Adjusted $14.59 billion vs. expected $14.67 billion

Delta reiterated that the CrowdStrike discontinuation in July represented a 45-cent hit to adjusted earnings, which came to $1.50 per share, slightly below analyst estimates. Delta struggled to recover after the outage, which cost thousands of microsoft Windows machines went offline, leading the airline to cancel thousands of flights. The incident resulted in a $380 million hit to revenue, Delta said.

Bastian has said that Delta is seeking compensation from CrowdStrike and Microsoft for the outage.

“The havoc that was created deserves, in my opinion, full compensation,” he told CNBC. “This matter is now in the hands of our attorneys. We hope to see a resolution, but we are keeping all our options open.”

Still, Delta’s net revenue rose 15% from a year earlier to $1.27 billion in the three months ended Sept. 30, with total revenue up 1% to $15.68 billion. Passenger revenue was flat from last year, but sales of premium offerings like first class continued to outpace those of the main cabin.

An oversupplied domestic market had capped airfares, but Delta President Glen Hauenstein said the airline’s “industry supply growth continues to streamline, positioning Delta well in the final quarter of the year and as that we are moving towards 2025”. The airline plans to expand capacity by 3% to 4% in the fourth quarter.

Delta said it still expects its full-year adjusted earnings to be between $6 and $7 per share, excluding the impact of CrowdStrike.