Delta Airlines publishes disappointing quarterly forecasts – 01/13/2023 at 14:51


(AOF) – The American company Delta Airlines, whose title lost 5.30% in pre-market trading, published its results for the fourth quarter. Over this period, net profit fell 25% to $828 million, or $1.29 per share, compared to 2019. Adjusted profit for the quarter was $1.48 per share (from $1.32 per share). dollar according to consensus), the carrier said. Revenue was $13.43 billion, up 17% from the December 2019 quarter.

Ed Bastian, Delta’s Chairman and CEO, forecasts “15-20% revenue growth in 2023 and unit cost improvement year-over-year,” allowing us to look ahead earnings of $5-6 per share for the full year and keep us on track for earnings per share of more than $7 in 2024.”

Delta stock is expected lower after a five-day bullish rally that saw it gain almost 10%. Investors are disappointed with the outlook for the first quarter. Delta Airlines is targeting adjusted earnings per share of between 15 cents and 40 cents on revenue up 17% to 17% from 2019. Refinitiv consensus is 55 cents for earnings per share.

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Once again weakened results for European airlines

With fuel accounting for up to 35% of their costs, professionals believe European airlines are unlikely to return to profit until 2023 or 2024 at the earliest. These players predict that energy prices will remain high at least until 2023. The International Air Transport Association (IATA) has announced a forecast of cumulative losses of 9.7 billion dollars in 2022 for airlines at around the world, it will still be necessary to wait until 2023 to see the return to profits on a global scale, due in particular to the surge in oil costs and the rise in labor costs. On the positive side, travel demand seems to be resisting the uncertainties caused by the international economic and political situation. However, the uncertainties concerning the Covid, the war in Ukraine, as well as the rise in prices are strengthening last-minute reservations. According to Iata, only 8% of international reservations made at the end of May went beyond September.

The social climate is deteriorating in low-cost companies

These companies are benefiting from a very strong recovery. They had already managed to monopolize 40% of air traffic in 2021, this proportion could even rise to 50% this year. However, strike movements have affected the activity of Volotea, EasyJet and Ryanair, with confrontations over pay and working conditions. In general, the sector faces a shortage of personnel. After having severely cut their workforce in 2020 and 2021, companies and airports must urgently recruit to support the relaunch of activity.



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