Delta Air Lines on the 9th cut its full-year profit forecast by about 25% at the midpoint. Travel demand remained solid and airfares rose, but that was not enough to offset a sharp jump in fuel costs. Delta expects annual fuel costs to rise by about 6 billion dollars from a year earlier, and said third-quarter fuel costs climbed 62% year on year to 4.1 billion dollars, more than 500 million dollars above its July assumption. Chief Financial Officer Erik Snell said fuel was "everything" behind the lowered profit forecast, noting that both crude oil and refined jet fuel prices rose after the summer. The company set its full-year adjusted earnings per share forecast at 5.10 to 5.60 dollars, down from 6.50 to 7.50 dollars in July, with the new midpoint of 5.35 dollars below the analyst average estimate of 5.46 dollars compiled by LSEG. For the third quarter, adjusted earnings per share came in at 1.72 dollars, slightly below the analyst average estimate of 1.76 dollars, while the adjusted operating margin fell to 9.4% from 11.1%. Demand remains strong, and according to Snell, nearly 60% of fourth-quarter seats are already booked, with revenue expected to rise about 20% year on year. Delta expects fourth-quarter adjusted earnings per share of 1.15 to 1.65 dollars, with the midpoint of 1.40 dollars roughly in line with the analyst average estimate of 1.39 dollars.
Delta Air Lines IncDelta cut its full-year profit forecast ~25% as surging crude and jet fuel costs (up 62% YoY in Q3) overwhelmed solid demand and higher fares.
