Delta cuts outlook as fuel costs jump
Delta Air Lines lowered its full-year earnings and free cash flow outlook after quarterly fuel expenses rose sharply. The carrier also reported adjusted Q3 earnings and revenue that both missed estimates.
By Harrison Miller Delta Air Lines stock retreated early Friday after the carrier missed estimates for its Q3 report and cut its guidance amid soaring fuel prices. Other airlines followed Delta lower Friday morning. 77 per share. 65 billion.
The results mark the first time Delta has missed earnings since Q3 2024, FactSet data shows. CEO Ed Bastian in the release said that demand "remains strong," supported by growing consumer preferences for travel and experiences. "Our resilience reflects the structural durability we've built over many years, enabling us to effectively navigate one of the most elevated fuel environments in recent times," Bastian said. 80 per gallon.
Bastian noted Delta expects to absorb $6 billion in increased fuel costs for the year. Given the heightened fuel costs, Delta slashed its outlook for the year. 50 per share previously. 5 billion.
Its prior guidance called for $3 billion to $4 billion in free cash flow. " The airline expects that revenue momentum to continue into Q4, and forecasts 20% sales growth for the upcoming quarter. 43 per share. STARLINK SPAT Meanwhile, SpaceX CEO Elon Musk has taken aim at Bastian and Delta after the airline in March opted for Amazon Leo as its Wi-Fir provider over Starlink.
In a May social media post, Musk said "Delta wanted to make it painful, difficult and expensive for their customers," regarding their Wi-Fi experience and potential partnership with Starlink. Bastian at company events and internal meetings reportedly said Delta tested with Starlink, but did not want to partner with Musk, according to unconfirmed reports. "He will lose his job over this," Musk wrote online, referring to Bastian, in response to the article. Musk continued to prod Bastian on Thursday, joking online that AI firms should test their models on Delta flights so they won't have internet access.
"I don't read it," Bastian told the Wall Street Journal when asked about Musk's criticisms. "All kidding aside, we know what we're doing in the space, and we've been the pioneer in Wi-Fi... Starlink's a great product, and we know it well. We were involved in the early years of bringing it to aviation, and they had a different business model than we had.
" DELTA STOCK DAL stock slid more than 2% early Friday, set to push further below its 21-day exponential moving average as well as its 50-day line. Delta shares have consolidated since August amid surging fuel prices. 68 but maintains an 18% gain on the year through Thursday. United Airlines and American Airlines ticked lower Friday.
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