👀 Ones to watch: Undervalued stocks to buy before they report Q3 earningsSee Undervalued Stocks

Delta shares rise after investor update

Published 12/09/2024, 14:42
© Reuters.
DAL
-

Investing.com -- Delta Air Lines (NYSE:DAL) saw its stock rise more than 5% at the open on Thursday after providing investors with an updated outlook for its third-quarter revenue and fiscal year earnings.

Despite cutting its third-quarter revenue forecast due to disruptions caused by a major cyber outage in July, Delta reassured investors with its full-year earnings projection.

The airline now expects third-quarter revenue to be flat to up 1% year-over-year, down from its previous projection of 2%-4% growth.

The revision comes after Delta canceled about 7,000 flights over five days in July following a system outage triggered by a software update from cybersecurity firm CrowdStrike (NASDAQ:CRWD), which impacted Microsoft (NASDAQ:MSFT) customers, including several airlines.

Delta estimated the outage cost the company approximately $380 million in direct revenue losses due to customer refunds and compensation in frequent flyer miles. Additionally, the airline faced $170 million in added expenses related to reimbursing customer expenses and crew-related costs.

Delta expects its fiscal 2024 earnings per share to land at or above the midpoint of its previous guidance of $6 to $7 per share, excluding the $0.45 impact from the IT outage on September quarter earnings per share.

The company’s solid long-term outlook helped fuel the 5% surge in Delta’s stock on Thursday, even as it continues to navigate the fallout from the operational disruptions.

The airline is also facing an investigation from the U.S. Transportation Department over the July cancellations, which could result in additional regulatory scrutiny.

Overall, Delta’s ability to maintain a robust earnings forecast for 2024 despite the challenges has bolstered investor confidence.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.