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The company has a decent earnings surprise history, having outperformed the Zacks Consensus Estimate in two of the preceding four quarters (missing the mark in the other two), the average beat being 7.9%.
Given this backdrop, let's delve deeper to unearth the factors that are likely to have influenced DAL’s fourth-quarter 2022 performance.
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted Delta’s top-line performance in the to-be-reported quarter. Driven by the uptick, Delta expects fourth-quarter 2022 operating margin to be 11%, i.e. at the top of the previously guided 9-11% range.
Total revenues are now likely to increase in the 7-8% range from fourth-quarter 2019 actuals (the earlier outlook was for an increase in the 5-9% range). Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn boosting the top line.
The presence of the Thanksgiving holiday period during the fourth quarter is likely to have boosted passenger volumes. Driven by upbeat traffic, load factor (% of seats filled by passengers) is likely to have been very impressive in the December quarter.
The Zacks Consensus Estimate for fourth-quarter load factor is 86%, currently, much higher than the year-ago actual reading of 78%. Our estimate for fourth-quarter 2022 load factor is currently pegged at 88.1%.
However, high operating costs may have affected the bottom-line performance in the to-be-reported quarter. DAL expects adjusted earnings per share in the $1.35-$1.40 range.
What Our Model Says
Our proven model predicts an earnings beat 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 beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Delta has an Earnings ESP of +5.65% (the Most Accurate Estimate is $1.34, at present, while the Zacks Consensus Estimate is presently pegged at $1.27) and a Zacks Rank #3.
Highlights of Q3
Delta's third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56 per share. Escalated operating expenses induced the earnings miss. Multiple flight cancellations and booking weakness due to Hurricane Ian also hurt results.
Delta reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider as well, since our model shows that these too have the right combination of elements to beat on their fourth-quarter 2022 earnings.
Southwest Airlines (LUV - Free Report) has an Earnings ESP of +0.16% and a Zacks Rank #3. LUV will release results on Jan 26.
We expect upbeat air-travel demand to have aided LUV’s fourth-quarter performance. However, high costs may have been a dampener.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #3. NSC will release results on Jan 25.
We expect the upbeat demand scenario to have aided NSC’s fourth-quarter performance. However, high fuel costs may have been a dampener.
Image: Shutterstock
Is a Beat in the Cards for Delta Air (DAL) in Q4 Earnings?
Delta Air Lines (DAL - Free Report) is scheduled to report fourth-quarter 2022 results on Jan 13, before market open.
The company has a decent earnings surprise history, having outperformed the Zacks Consensus Estimate in two of the preceding four quarters (missing the mark in the other two), the average beat being 7.9%.
Given this backdrop, let's delve deeper to unearth the factors that are likely to have influenced DAL’s fourth-quarter 2022 performance.
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted Delta’s top-line performance in the to-be-reported quarter. Driven by the uptick, Delta expects fourth-quarter 2022 operating margin to be 11%, i.e. at the top of the previously guided 9-11% range.
Total revenues are now likely to increase in the 7-8% range from fourth-quarter 2019 actuals (the earlier outlook was for an increase in the 5-9% range). Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn boosting the top line.
The presence of the Thanksgiving holiday period during the fourth quarter is likely to have boosted passenger volumes. Driven by upbeat traffic, load factor (% of seats filled by passengers) is likely to have been very impressive in the December quarter.
The Zacks Consensus Estimate for fourth-quarter load factor is 86%, currently, much higher than the year-ago actual reading of 78%. Our estimate for fourth-quarter 2022 load factor is currently pegged at 88.1%.
However, high operating costs may have affected the bottom-line performance in the to-be-reported quarter. DAL expects adjusted earnings per share in the $1.35-$1.40 range.
What Our Model Says
Our proven model predicts an earnings beat 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 beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Delta has an Earnings ESP of +5.65% (the Most Accurate Estimate is $1.34, at present, while the Zacks Consensus Estimate is presently pegged at $1.27) and a Zacks Rank #3.
Highlights of Q3
Delta's third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56 per share. Escalated operating expenses induced the earnings miss. Multiple flight cancellations and booking weakness due to Hurricane Ian also hurt results.
Delta reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider as well, since our model shows that these too have the right combination of elements to beat on their fourth-quarter 2022 earnings.
Southwest Airlines (LUV - Free Report) has an Earnings ESP of +0.16% and a Zacks Rank #3. LUV will release results on Jan 26.
We expect upbeat air-travel demand to have aided LUV’s fourth-quarter performance. However, high costs may have been a dampener.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #3. NSC will release results on Jan 25.
We expect the upbeat demand scenario to have aided NSC’s fourth-quarter performance. However, high fuel costs may have been a dampener.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.