Anindita Chatterjee
Updated on: October 17, 2024 4:55 am GMT
Delta Air Lines, United Airlines, and American Airlines are all gearing up for a critical moment. Each airline is set to report their third-quarter earnings soon, and investors are closely watching what these numbers might reveal about the future of the airline industry. With Delta set to announce its earnings this Thursday, the stakes are especially high.
Anticipated Earnings Reports
As the three major airlines prepare to disclose their financial results, analysts have been busy crunching the numbers. Here’s what they predict for the upcoming earnings reports:
- American Airlines: Expected revenue of $13.44 billion with an earnings per share (EPS) of 8 cents. Earlier in the summer, American had estimated its EPS near breakeven but recent forecasts suggest a better performance with an anticipated EPS of 26 cents.
- United Airlines: Analysts predict revenue of $14.78 billion and an EPS of $3.08. Investors are optimistic about potential capital returns, possibly including share buybacks, although the timing remains uncertain.
- Delta Air Lines: Anticipated to report revenue of $14.70 billion with an EPS forecast of $1.54. Following its earnings report on October 10, Delta will hold an investor day on November 20 to provide more insights.
This series of earnings reports comes at a time when the stock prices of these airlines reflect varying levels of market confidence. On Monday, American Airlines saw its stock price inch up by 0.17%, while Delta’s stock fell by 0.49%.
Market Trends and Stock Performance
The stock market experienced a slight uptick recently, with the S&P 500 climbing by 0.42%. However, Delta’s stock underperformed, closing the day at $50.79, reflecting a drop of 1.46%. In contrast, over the past month, Delta’s shares have risen 21.3%, significantly outpacing both the Transportation sector and the S&P 500.
As analysts closely watch these developments, Bank of America has commented on Delta’s potential earnings guidance. The bank suggests Delta may adopt a conservative tone for its fourth-quarter outlook during its upcoming earnings call. Alternatively, the airline might take the opportunity to emphasize a longer-term vision at the investor day.
What Investors Are Watching
With earnings reports approaching, several factors are essential for investors:
- Fuel Prices: Fluctuations in fuel prices can impact profitability directly. This shows how critical resource management is for the airlines.
- Revenue Trends: Changes in travel demand may influence revenue reports. A positive trend could bolster investor sentiment.
- Analyst Revisions: Changes in analyst forecasts can provide insight into the airlines’ expected performance. Upward revisions generally signal confidence in the airline’s business health.
For Delta specifically, the Zacks Consensus Estimate is predicting net sales of $15.76 billion, which would represent a 1.72% increase from the previous year.
Looking Ahead
As we move closer to the earnings reports, investors will likely focus on several aspects of each airline’s performance:
- How each airline copes with changing travel demands.
- The impact of economic conditions on airline profitability.
- Insights from management during the earnings calls about future strategies and market outlooks.
Companies like Delta, American, and United are significant players in the aviation sector, and their earnings reports can often signal broader trends in the industry.
The Final Takeaway
In the lead-up to the earnings announcements, the interplay of market dynamics, investor sentiment, and operational performance will be closely scrutinized. Investors should remain vigilant as these reports unfold, as they are not just numbers; they tell a greater story about the airline industry’s recovery and growth in a post-pandemic landscape.
As airlines share their reports about how much money they made and how much they earned for each share, it could really shake up the stock market. This won’t just impact the airlines; it could also change things for other businesses and the economy as a whole. It’s important to pay attention to these trends so that people can make smart choices when it comes to investing.
