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Delta (DAL) to Report Q4 Earnings: A Beat in the Offing?
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Delta Air Lines (DAL - Free Report) is scheduled to report fourth-quarter 2021 results on Jan 13, before the market opens.
DAL’s bottom line lagged the Zacks Consensus Estimate in two of the last four quarters (outpacing the consensus mark in the other two). The average beat is 26.2%.
The Zacks Consensus Estimate for December-quarter earnings is currently pegged at 11 cents, indicating a rebound from the estimated loss of 18 cents, 60 days ago. This favorable revision is mainly led by an upbeat passenger traffic, driven mainly in the holiday season.
Against this backdrop, let’s discuss the factors that might have impacted Delta’s performance in the December quarter.
The spate of flight cancellations due to the omicron-induced staffing crunch and bad weather is unlikely to adversely impact the fourth-quarter results. This is because the entire crisis aggravated mainly on the Christmas Eve, implying that only a week of October-December months was affected by such an unprecedented scenario.
In fact, passenger revenues in the December quarter are likely to have been upbeat, driven by the huge traffic attracted during the Thanksgiving holiday period. The Zacks Consensus Estimate for fourth-quarter passenger revenues is currently pegged at $7,353 million, indicating an increase of 2.3% from the third-quarter 2021 reported level.
The Zacks Consensus Estimate for fourth-quarter total revenues per available seat miles (TRASM: a key measure of unit revenues) is currently pegged at 17.16 cents, indicating a 1.4% rise from the figure reported in the third quarter of 2021.
Owing to favorable traffic, load factor (% of seats filled with passengers) is expected to have improved year over year in the December quarter. The Zacks Consensus Estimate for the to-be-reported quarter’s load factor is currently pegged at 78%, implying growth from 42% reported in the year-ago quarter.
With the omicron variant expected to have a limited impact on the December quarter, management hopes to generate an adjusted pre-tax profit of approximately $200 million in the December quarter.
However, high fuel costs might have dented the bottom line in the to-be-reported quarter. The Zacks Consensus Estimate for average fuel price per gallon (adjusted) is currently pegged at $2.16, indicating a 9.6% sequential increase.
What Does the Zacks Model Unveil?
The proven Zacks model predicts a bottom-line outperformance for Delta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings surprise, which is the case here. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Delta has an Earnings ESP of +104.03% as the Most Accurate Estimate is currently pegged at 23 cents, 12 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Delta carries a Zacks Rank #3, currently.
Highlights of Q3
Delta's earnings (excluding $1.59 from non-recurring items) of 30 cents per share outpaced the Zacks Consensus Estimate of 15 cents. Results came against the year-ago quarter’s loss of $3.30 per share.
Delta’s revenues came in at $9,154 million, which not only beat the Zacks Consensus Estimate of $8,370.6 million but also soared in excess of 100% from the year-ago figure as air-travel demand (mainly for leisure) improves after remaining tepid due to the Delta variant of COVID-19.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider Landstar System (LSTR - Free Report) and Southwest Airlines (LUV - Free Report) as these stocks also possess the right combination of elements to beat on earnings this reporting cycle.
Landstar System has an Earnings ESP of +4.31% and is Zacks #3 Ranked, presently. LSTR will release fourth-quarter 2021 results on Jan 26.
Landstar’s fourth-quarter results are expected to be aided by an improved freight scenario in the United States. Higher truck rates owing to tight truck capacity should aid December-quarter performance.
Southwest Airlines has an Earnings ESP of +475.00% and is currently a #3 Ranked player. LUV will release fourth-quarter 2021 results on Jan 27.
Southwest Airlines expects to be profitable in the fourth quarter of 2021 owing to a strong Thanksgiving holiday travel period, higher fares and benefits from the co-brand credit card agreement with Chase.
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Delta (DAL) to Report Q4 Earnings: A Beat in the Offing?
Delta Air Lines (DAL - Free Report) is scheduled to report fourth-quarter 2021 results on Jan 13, before the market opens.
DAL’s bottom line lagged the Zacks Consensus Estimate in two of the last four quarters (outpacing the consensus mark in the other two). The average beat is 26.2%.
Delta Air Lines, Inc. Price and EPS Surprise
Delta Air Lines, Inc. price-eps-surprise | Delta Air Lines, Inc. Quote
The Zacks Consensus Estimate for December-quarter earnings is currently pegged at 11 cents, indicating a rebound from the estimated loss of 18 cents, 60 days ago. This favorable revision is mainly led by an upbeat passenger traffic, driven mainly in the holiday season.
Against this backdrop, let’s discuss the factors that might have impacted Delta’s performance in the December quarter.
The spate of flight cancellations due to the omicron-induced staffing crunch and bad weather is unlikely to adversely impact the fourth-quarter results. This is because the entire crisis aggravated mainly on the Christmas Eve, implying that only a week of October-December months was affected by such an unprecedented scenario.
In fact, passenger revenues in the December quarter are likely to have been upbeat, driven by the huge traffic attracted during the Thanksgiving holiday period. The Zacks Consensus Estimate for fourth-quarter passenger revenues is currently pegged at $7,353 million, indicating an increase of 2.3% from the third-quarter 2021 reported level.
The Zacks Consensus Estimate for fourth-quarter total revenues per available seat miles (TRASM: a key measure of unit revenues) is currently pegged at 17.16 cents, indicating a 1.4% rise from the figure reported in the third quarter of 2021.
Owing to favorable traffic, load factor (% of seats filled with passengers) is expected to have improved year over year in the December quarter. The Zacks Consensus Estimate for the to-be-reported quarter’s load factor is currently pegged at 78%, implying growth from 42% reported in the year-ago quarter.
With the omicron variant expected to have a limited impact on the December quarter, management hopes to generate an adjusted pre-tax profit of approximately $200 million in the December quarter.
However, high fuel costs might have dented the bottom line in the to-be-reported quarter. The Zacks Consensus Estimate for average fuel price per gallon (adjusted) is currently pegged at $2.16, indicating a 9.6% sequential increase.
What Does the Zacks Model Unveil?
The proven Zacks model predicts a bottom-line outperformance for Delta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings surprise, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Delta has an Earnings ESP of +104.03% as the Most Accurate Estimate is currently pegged at 23 cents, 12 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Delta carries a Zacks Rank #3, currently.
Highlights of Q3
Delta's earnings (excluding $1.59 from non-recurring items) of 30 cents per share outpaced the Zacks Consensus Estimate of 15 cents. Results came against the year-ago quarter’s loss of $3.30 per share.
Delta’s revenues came in at $9,154 million, which not only beat the Zacks Consensus Estimate of $8,370.6 million but also soared in excess of 100% from the year-ago figure as air-travel demand (mainly for leisure) improves after remaining tepid due to the Delta variant of COVID-19.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider Landstar System (LSTR - Free Report) and Southwest Airlines (LUV - Free Report) as these stocks also possess the right combination of elements to beat on earnings this reporting cycle.
Landstar System has an Earnings ESP of +4.31% and is Zacks #3 Ranked, presently. LSTR will release fourth-quarter 2021 results on Jan 26.
Landstar’s fourth-quarter results are expected to be aided by an improved freight scenario in the United States. Higher truck rates owing to tight truck capacity should aid December-quarter performance.
Southwest Airlines has an Earnings ESP of +475.00% and is currently a #3 Ranked player. LUV will release fourth-quarter 2021 results on Jan 27.
Southwest Airlines expects to be profitable in the fourth quarter of 2021 owing to a strong Thanksgiving holiday travel period, higher fares and benefits from the co-brand credit card agreement with Chase.