Airline stocks fell Friday after Delta Airlines Inc. lowered its 2024 earnings guidance amid macroeconomic pressures.
The air carrier reported a top- and bottom-line beat with its fourth-quarter results before market open, although its shares fell 8% after the company cut its earnings outlook.
Speaking during a conference call to discuss the results, Delta CEO Ed Bastian described the factors that influenced the lowered guidance. “There are a bunch of macros that we look at,” he said, adding: “The geopolitical front continues to be quite testy.” The CEO also pointed to energy prices and ongoing supply-chain issues that have been weighing on the airline industry.
Related: Delta almost doubles Q4 profit, but shares slide on lowered earnings guidance
Delta also said it expects unit revenues in the March quarter to be flat to down 3% over 2023, according to the company’s president, Glen Hauenstein. “The March quarter includes a headwind from higher international mix, the normalization of travel credit utilization and lapping a competitor’s operational challenges in the year-ago period,” he said in a statement.
For 2024, Delta
DAL,
expects earnings of $6 to $7 a share, below the target of over $7 a share the company outlined at an investor day in December 2022. Delta also expects 2024 free cash flow of $3 billion to $4 billion, an improvement of up to $2 billion over 2023.
The airline also announced Friday that it was ordering 20 Airbus
AIR,
A350-1000 aircraft for its long-distance fleet.
Related: Alaska Airlines cancels 737 Max 9 flights through Saturday
Shares of American Airlines Group Inc.
AAL,
are down 8.7%, while United Airlines Holdings Inc.’s stock
UAL,
is down 9.5% and JetBlue Airways Corp. shares
JBLU,
are down 4.4%.
Shares of Alaska Air Group Inc.
ALK,
which is dealing with the fallout from the recent incident in which a panel blew out of a 737 Max 9 aircraft, are down 4.9%. The U.S. Global Jets exchange-traded fund
JETS
is also down 4.5% Friday.
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