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Delta Air Lines (DAL) Q1 Earnings: Is a Surprise in Store?
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Delta Air Lines, Inc. (DAL - Free Report) is scheduled to report first-quarter 2017 results on Apr 12, before the market opens.
This Atlanta, GA-based carrier’s fourth-quarter earnings (excluding special items) of 82 cents per share met the Zacks Consensus Estimate. The bottom line, however, declined over 30% on a year-over-year basis. Operating revenues of $9,458 million beat the Zacks Consensus Estimate by 1.1%. Revenues declined marginally from the year-ago figure.
Earnings Whispers
Our proven model does not show conclusively that Delta Air Lines is likely to beat earnings in the first quarter of 2017. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to increase the odds of an earnings surprise. However, that is not the case as highlighted below.
Zacks ESP: The Earnings ESP for Delta Air Lines is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 73 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Delta Air Lines carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP complicates our surprise prediction.
Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Factors Likely at Play
For the first quarter of 2017, the carrier expects operating margin in the range of 10% to 11%. The estimated fuel price, including taxes and refinery impact, is projected in the range of $1.68 to $1.73 per gallon for the first quarter. System capacity is projected to decline approximately 0.5% on a year-over-year basis. The company expects passenger unit revenue to decline approximately 0.5% year over year in the first quarter of 2017.
Cost per available seat miles (CASM), excluding profit sharing, is expected to increase in the band of 5% to 6% in the first quarter due to the various labor deals inked by the company over the past few months. We note that labor deals are in vogue in the airline space. Not only Delta, but other players in the space like United Continental Holdings (UAL - Free Report) and Southwest Airlines (LUV - Free Report) too have inked deals with various labor groups over the past few months.
Price Performance
We remind investors that the Delta stock underperformed the broader Zacks categorized Transportation-Airline industry over the last three months due to multiple headwinds. The company lost 12.17%, while the industry gained 1.22%.
Stock to Consider
Investors interested in the airline space may consider Hawaiian Holdings (HA - Free Report) as our model shows it has the right combination of elements to post an earnings beat in its next release.
Hawaiian Holdings has an Earnings ESP of 2.38% and a Zacks Rank #3. The company beat the Zacks Consensus Estimate in three out of four quarters, with an average positive surprise of 4.19%. The company is scheduled to release its first quarter results on Apr 20. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Delta Air Lines (DAL) Q1 Earnings: Is a Surprise in Store?
Delta Air Lines, Inc. (DAL - Free Report) is scheduled to report first-quarter 2017 results on Apr 12, before the market opens.
This Atlanta, GA-based carrier’s fourth-quarter earnings (excluding special items) of 82 cents per share met the Zacks Consensus Estimate. The bottom line, however, declined over 30% on a year-over-year basis. Operating revenues of $9,458 million beat the Zacks Consensus Estimate by 1.1%. Revenues declined marginally from the year-ago figure.
Earnings Whispers
Our proven model does not show conclusively that Delta Air Lines is likely to beat earnings in the first quarter of 2017. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to increase the odds of an earnings surprise. However, that is not the case as highlighted below.
Zacks ESP: The Earnings ESP for Delta Air Lines is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 73 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Delta Air Lines carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP complicates our surprise prediction.
Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Factors Likely at Play
For the first quarter of 2017, the carrier expects operating margin in the range of 10% to 11%. The estimated fuel price, including taxes and refinery impact, is projected in the range of $1.68 to $1.73 per gallon for the first quarter. System capacity is projected to decline approximately 0.5% on a year-over-year basis. The company expects passenger unit revenue to decline approximately 0.5% year over year in the first quarter of 2017.
Cost per available seat miles (CASM), excluding profit sharing, is expected to increase in the band of 5% to 6% in the first quarter due to the various labor deals inked by the company over the past few months. We note that labor deals are in vogue in the airline space. Not only Delta, but other players in the space like United Continental Holdings (UAL - Free Report) and Southwest Airlines (LUV - Free Report) too have inked deals with various labor groups over the past few months.
Price Performance
We remind investors that the Delta stock underperformed the broader Zacks categorized Transportation-Airline industry over the last three months due to multiple headwinds. The company lost 12.17%, while the industry gained 1.22%.
Stock to Consider
Investors interested in the airline space may consider Hawaiian Holdings (HA - Free Report) as our model shows it has the right combination of elements to post an earnings beat in its next release.
Hawaiian Holdings has an Earnings ESP of 2.38% and a Zacks Rank #3. The company beat the Zacks Consensus Estimate in three out of four quarters, with an average positive surprise of 4.19%. The company is scheduled to release its first quarter results on Apr 20. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>