Airline stocks tumble after Delta trims profit forecast
- Delta shares fell after the company trimmed its 2024 earnings forecast.
- The company reported a fourth-quarter earnings beat as bookings, both for corporate and leisure travel, continued to pick up from the Covid-19 pandemic lows.
- Airline stocks including United, American and Southwest were also down on the news.
Delta Air Lines shares slipped about 9% Friday after the company trimmed its 2024 earnings forecast.
Delta forecast full-year earnings per share of $6 to $7, below its previous estimate of more than $7 per share for 2024.
Other major airlines including United, American and Southwest also fell on the new estimate, released alongside quarterly earnings. United and American were down about 10% each, while Southwest fell more than 4%.
Delta finished 2023 by doubling its quarterly profit as bookings, both for corporate and leisure travel, continued to pick up from the Covid-19 pandemic lows. The company reported $2.04 billion in net income in the fourth quarter, sharply up from the $828 million reported in the year-ago period.
Delta CEO Ed Bastian said in a CNBC interview that the airline has recovered almost 90% of its travel demand from its pre-pandemic numbers. Bastian said he expects strong growth in international travel as Americans continue to set their sights on overseas destinations.
"We expect to see an inflection point in the first part of this new year, in terms of our domestic unit revenues turning positive," Bastian said.
Delta is coming off a strong 2023 where shares surged more than 20%, but the stock is still down from its all-time high of $63.16, notched in July 2019. The stock closed Friday at $38.47 per share.
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