Delta Shares Fall 10% After Q1 Forecast Cut Amid Sluggish Demand
Delta Air Lines (DAL, Financial) shares plunged more than 10% in pre-market trading Tuesday after the carrier slashed its Q1 guidance ahead of its appearance at the J.P. Morgan Industrials Conference.
Warning! GuruFocus has detected 4 Warning Sign with DAL.
The airline now expects Q1 revenue growth of 3% to 4% year-over-year, a significant downgrade from its previous forecast of 7% to 9%. Company officials cited weakening consumer and corporate confidence amid escalating macroeconomic uncertainties, which have softened domestic demand.
Revenues from premium, international, and loyalty segments remain on track despite the broader slowdown. However, Delta cut its Q1 EPS guidance to a range of $0.30 to $0.50, well below the earlier projection of $0.70 to $1.00 and the $0.83 consensus.
The operating margin outlook was trimmed to 4%-5%, down from 6%-8%. Analysts say these revisions reflect caution amid persistent inflation and supply chain challenges.
This article first appeared on GuruFocus.
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