Delta Air Lines Q2 earnings: record revenue expected in the current quarter

Delta Air Lines Inc (NYSE: DAL) is losing in premarket on Thursday after reporting weaker-than-expected revenue for its second financial quarter. 

The airline stock is taking a hit also because it disappointed in terms of future outlook as well. 

Delta Air Lines shares are now down some 20% versus their year-to-date high. 

Delta Air Lines disappoints on earnings guidace

Delta Air Lines now forecasts its per-share earnings to fall in the range of $1.70 to $2.0 in the current quarter. 

Analysts, in comparison, were at $2.05. Still, Glen Hauenstein – president of the major U.S. air carrier said in a press release today:

Diverse revenue streams, including premium and loyalty, contributed higher growth and margins, underpinning Delta’s industry-leading financial performance and increasing our financial durability.

DAL did, however, forecast record revenue for its fiscal Q3 on the back of solid summer travel demand.

Delta Air Lines Q2 earnings snapshot

• Earned $1.31 billion versus the year-ago $1.87 billion
• Per-share earnings also dropped from $2.84 to $2.01
• Adjusted EPS printed at $2.36 as per the earnings report
• Revenue popped 5.4% year-over-year to $15.41 billion
• Consensus was $2.36 a share on $15.45 billion in revenue

Delta Air Lines reported load factor at 87% for the second quarter – down from 88% a year ago. President Hauenstein also said on Thursday:

As our international network and core hubs approach full restoration and we return to a normal cadence of retiring aircraft, Delta’s capacity growth is decelerating into the second half.

Delta Air Lines raises dividend

On Thursday, Delta Air Lines also announced a 50% increase in dividend beginning in its September quarter.

The air carrier also reiterated its full-year guidance for $6.0 to $7.0 of per-share earnings and up to $4.0 billion in revenue. According to CEO Ed Bastian:

Delta is delivering industry-leading operational performance and best-in-class service for our customers. We delivered record June quarter revenue and pre-tax income of $2 billion with a 15 percent operating margin.

In April, Ravi Shanker – a Morgan Stanley analyst reiterated his super bullish view on Delta Air Lines stock that he’s convinced could climb to $85 over the next 12 months. His price target signals potential for a near 100% gain from here. DAL is currently down about 20% versus its year-to-date high in mid-May.

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