We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Delta Air Lines (DAL) Q3 Earnings: Disappointment in Store?
Read MoreHide Full Article
Delta Air Lines, Inc. (DAL - Free Report) is scheduled to report third-quarter 2017 results on Oct 11, before the market opens.
This Atlanta, GA-based carrier’s second-quarter earnings of $1.64 per share missed the Zacks Consensus Estimate of $1.66. However, earnings climbed 11.56% on a year-over-year basis on the back of a 3.3% operating revenue growth. Meanwhile, quarterly operating revenues of $10.79 billion fell short of the Zacks Consensus Estimate.
In fact, the carrier may be in for a disappointment in the third quarter too. The negative sentiment surrounding the stock can be gauged from the fact that the Zacks Consensus Estimate for the third quarter has decreased in excess of 14% over the last three months.
Owing to multiple headwinds, the stock has struggled so far this year, underperforming the Zacks Transportation-Airline industry on a year-to-date basis. The stock has gained 5.7%, whereas the industry has rallied 15.2%.
Our proven model too does not show conclusively that Delta Air Lines will beat earnings in third-quarter 2017. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. 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 $1.54 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 #5 (Strong Sell).
In fact, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when it is witnessing negative estimate revisions like Delta Air Lines is.
Factors Likely at Play
We expect Delta Air Lines’ third-quarter results to be hurt by the back-to-back hurricanes which resulted in the carrier cancelling multiple flights. Delta Air Lines expects passenger unit revenues to increase approximately 2% in third-quarter 2017 on a year-over-year basis. The guidance includes a negative impact of Irma to the tune of 1 point. Operating margin for the third quarter is projected between 15.5% and 16.5%; Hurricane Irma is likely to impact the metric to the tune of approximately 120 million.
It is not only Delta Air Lines whose third-quarter results are likely to be impacted by the natural calamities. Results of other carriers like United Continental Holdings (UAL - Free Report) and American Airlines Group (AAL - Free Report) are also likely to be hurt by the events.
High fuel costs are also expected to limit earnings growth in the quarter. Fuel price per gallon in third-quarter 2017 is expected between $1.68 and $1.73. With the company inking multiple labor deals, labor costs have spiked. High labor costs have been hurting the company for quite some time and the third quarter is likely to be no different.
We are, however, appreciative of the company's efforts to enhance shareholders’ wealth through dividends and share buybacks.
With Delta Air Lines likely to disappoint, investors interested in the airline space may consider Hawaiian Holdings (HA - Free Report) as our model shows that this company possesses the right combination of elements to post an earnings beat in its upcoming release.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Delta Air Lines (DAL) Q3 Earnings: Disappointment in Store?
Delta Air Lines, Inc. (DAL - Free Report) is scheduled to report third-quarter 2017 results on Oct 11, before the market opens.
This Atlanta, GA-based carrier’s second-quarter earnings of $1.64 per share missed the Zacks Consensus Estimate of $1.66. However, earnings climbed 11.56% on a year-over-year basis on the back of a 3.3% operating revenue growth. Meanwhile, quarterly operating revenues of $10.79 billion fell short of the Zacks Consensus Estimate.
In fact, the carrier may be in for a disappointment in the third quarter too. The negative sentiment surrounding the stock can be gauged from the fact that the Zacks Consensus Estimate for the third quarter has decreased in excess of 14% over the last three months.
Owing to multiple headwinds, the stock has struggled so far this year, underperforming the Zacks Transportation-Airline industry on a year-to-date basis. The stock has gained 5.7%, whereas the industry has rallied 15.2%.
Our proven model too does not show conclusively that Delta Air Lines will beat earnings in third-quarter 2017. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. 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 $1.54 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 #5 (Strong Sell).
In fact, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when it is witnessing negative estimate revisions like Delta Air Lines is.
Factors Likely at Play
We expect Delta Air Lines’ third-quarter results to be hurt by the back-to-back hurricanes which resulted in the carrier cancelling multiple flights. Delta Air Lines expects passenger unit revenues to increase approximately 2% in third-quarter 2017 on a year-over-year basis. The guidance includes a negative impact of Irma to the tune of 1 point. Operating margin for the third quarter is projected between 15.5% and 16.5%; Hurricane Irma is likely to impact the metric to the tune of approximately 120 million.
It is not only Delta Air Lines whose third-quarter results are likely to be impacted by the natural calamities. Results of other carriers like United Continental Holdings (UAL - Free Report) and American Airlines Group (AAL - Free Report) are also likely to be hurt by the events.
High fuel costs are also expected to limit earnings growth in the quarter. Fuel price per gallon in third-quarter 2017 is expected between $1.68 and $1.73. With the company inking multiple labor deals, labor costs have spiked. High labor costs have been hurting the company for quite some time and the third quarter is likely to be no different.
We are, however, appreciative of the company's efforts to enhance shareholders’ wealth through dividends and share buybacks.
Delta Air Lines, Inc. Price and EPS Surprise
Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote
A Transportation Gem
With Delta Air Lines likely to disappoint, investors interested in the airline space may consider Hawaiian Holdings (HA - Free Report) as our model shows that this company possesses the right combination of elements to post an earnings beat in its upcoming release.
Hawaiian Holdings has an Earnings ESP of +1.20% and a Zacks Rank #3. The company will report third-quarter results on Oct 19. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>