2 Reasons Why Delta Air Lines, Inc. (DAL) May Not Fly High This Earnings Seasons by Estimize
Delta Air Lines (DAL) Industrials – Airlines | Reports April 14,Before Market Opens
Delta Air Lines, Inc. (DAL) 1Q Earnings – Key Takeaways
- The Estimize consensus is looking for EPS of $1.30, 1 cent above Wall Street, with revenue expectations of $9.28 billion, right in line with the Street
- Key metrics, including PRASM, continue to fall short thanks to choppy domestic pricing and weaker business travel trends
- Demand for international flights have been largely subdued after terrorist attacks in Europe and currency headwinds.
- What are you expecting for DAL? Get your estimate in here!
Delta Air Lines (DAL) is soaring into its first quarter earnings this Thursday with lofty expectations. The Estimize consensus is looking for EPS of $1.30, 1 cent above Wall Street, with revenue expectations of $9.28 billion, right in line with the Street. The crowd-sourced community is optimistic in regards to Delta’s profitability, raising EPS estimates 12% in the past 3 months. Compared to the same period last year, this represents a projected 189% increase on the bottom line. It’s not surprising that Delta often tops expectations, beating Estimize in 56% of report quarters.
Delta was one of of the top performing U.S. airlines in 2015, despite mixed earnings in the past 2 years. Last quarter, Delta Air Lines reported better-than-expected results on the bottom line but missed its sales target, consistent with a year long trend of falling short on the top line. Revenue has clearly been the airline’s biggest problem, continually coming in flat or negative on a year-over-year basis. Choppy domestic pricing on top of weaker business travel trends had a material impact on results in fiscal 2015. Moreover, key metrics including PRASM (passenger revenue per available seat mile) continue to fall short of expectations. This past week Delta announced that PRASM would be on the lower end of its guidance, likely falling 4.5% in the first quarter.
Most international airlines have seen significant demand headwinds due to currency fluctuations and the terror attacks in Paris and Brussels. Still, share prices for DAL have remained strong and are up 11.95% in the last 12 months. Throughout this volatility, Delta Air Lines has maintained a sound balance sheet, reducing its net debt to $6.7 billion from $15 billion at the end of 2015. This has helped drive strong free cash flow and is expected to continue as air travel demand is likely to improve. For the remainder of 2016, revenue is projected to grow 1% on a 2 to 4% capacity increase.
Do you think DAL can beat estimates? There is still time to get your estimate in here!