What to watch for when Delta Air Lines (DAL) reports third-quarter 2024 earnings

Shares of Delta Air Lines (NYSE: DAL) fell over 2% on Wednesday. The stock has gained 14% in the last month. The airline is expected to report its third quarter 2024 earnings results on Thursday, October 10, before the market opens. Here’s what to expect from the earnings report:

revenue

Delta now expects total revenue for the third quarter of 2024 to remain stable and increase 1% year over year, compared to an increase of 2-4% originally forecast. The company forecasts total revenue between $15.75 billion and $15.90 billion on a GAAP basis and $14.55 billion to $14.70 billion on an adjusted basis.

Analysts estimate revenue of $15.7 billion for the third quarter of 2024, compared to revenue of $15.5 billion in the same period last year. In the second quarter of 2024, GAAP operating income increased 7% year-over-year to $16.7 billion.

Result

The consensus estimate for third-quarter 2024 earnings per share is $1.55, compared to third-quarter 2023 adjusted earnings per share of $2.03. In the second quarter of 2024, adjusted earnings per share fell 12% year over year to $2.36.

Points to note

Last quarter, Delta forecast third-quarter 2024 earnings per share between $1.70 and $2.00. In an investor update last month, the company said the technology-related outage was expected to impact $0.45 per share (EPS) in the third quarter. Without this influence, earnings per share are likely to be at the upper end of the original forecast.

Delta should benefit from strong travel demand. There is positive momentum at home and in the transatlantic region. Improving business travel also brings benefits to the airline. As noted in the investor update, Delta’s revenue trends have improved as expected, with travel demand strong and industry supply growth moderating.

Capacity for the September quarter is now expected to rise about 4% year-on-year, compared with the previous forecast of 5-6%. Unit costs excluding fuel (CASM-Ex) are expected to rise around 5.5% year-on-year, compared to the previous forecast of 1-2%. The updated cost forecast takes into account factors such as increased weather disruptions, the failure of CrowdStrike technology and the decision to reward employees with confirmed flight passes.