Delta Air Lines is set to report third-quarter results on October 9, with Wall Street expecting $1.76 non-GAAP EPS and $18.92B in revenue. Revenue expectations remain firm, but earnings estimates have weakened as higher fuel costs threaten margins, and the current consensus EPS of $1.76 sits below even the low end of management's own guidance of $2.00-$2.50 adjusted EPS. Over the past three months, EPS has seen 10 downward revisions versus 7 upward revisions, while revenue has recorded 7 upward revisions and no downward revisions. The pressure was already visible in the second quarter, when adjusted revenue jumped 13.9% to $17.7B on a 12.4% increase in TRASM, but adjusted EPS fell 26% to $1.56 as fuel expense surged 77% to $4.4B and non-fuel CASM rose 6.8%. Fuel remains the key swing factor: the second-quarter adjusted fuel price reached $3.93 per gallon, and a refinery outage is expected to affect the third quarter. Delta has beaten EPS estimates in 7 of its last 8 quarters and revenue estimates in all 8, and shares recently traded near $81.81, up about 19% year to date.
Delta Air Lines IncHigher fuel costs and a refinery outage are squeezing margins, with consensus EPS cut below management's guidance.
