Delta shares fall after sales guidance disappoints

Delta Air Lines Revenue is expected to increase in the fourth quarter, thanks to resilient travel demand and strong bookings for year-end holidays.

The Atlanta-based carrier on Thursday forecast fourth-quarter adjusted earnings of $1.60 to $1.85 per share, above the Wall Street estimate of $1.71, according to LSEG, and above the adjusted $1.28 per share reported a year ago.

Delta shares fell more than 5% in premarket trading.

Revenues will likely grow between 2% and 4% from a year ago, compared to estimates of 4.1% growth. The carrier warned that it expects a 1-point revenue hit from lower demand before and after the Nov. 5 U.S. presidential election.

“We expect to see a little bit of churn around the election, similar to what we've seen in past national elections,” CEO Ed Bastian said in an interview. “Consumers, I think, will take some pause in making investment decisions, whether it's discretionary or other things. I think you're going to hear from other industries as well.”

He also said that holiday bookings are very strong.

Here's how Delta performed in the third quarter compared to Wall Street expectations based on LSEG consensus estimates:

• Earnings per share: $1.50 adjusted vs $1.52 expected
• Revenue: $14.59 billion adjusted vs $14.67 billion expected

Delta reiterated that the Crowdstrike outage in July was a 45-cent hit to adjusted earnings, which came in at $1.50 per share, slightly below analyst estimates. Delta has struggled to recover after the outage, which took thousands Microsoft Windows machines are offline, prompting airlines to cancel thousands of flights. The incident was a $380 million hit to revenue, Delta said.

Bastian said Delta is seeking damages from CrowdStrike and Microsoft from the outage.

“The disaster that was created, in my opinion, is fully deserving of compensation,” he told CNBC. “This matter is now in the hands of our attorneys. We hope that we will see a resolution but we will keep all our options open.”

Still, Delta's net income rose 15% from a year ago to $1.27 billion in the three months ended Sept. 30, with total revenue up 1% to $15.68 billion. Passenger revenue was flat from last year, but sales from premium offerings like first class continued to outpace basic cabins.

An oversupplied domestic market has kept a lid on airfares but Delta's president, Glenn Hauenstein, said the airline's “industrial supply growth continues to be rational, positioning Delta well for the final quarter of the year and as we move into 2025.” The carrier plans to expand capacity by 3% to 4% in the fourth quarter.

Delta said it still expects its full-year adjusted earnings, excluding the crowdstrike impact, to come in at $6 to $7 a share.