Delta Air Lines 2023 Profit Forecast Tops Views as Travel Boom Continues; Lifts Fourth-Quarter Bottom-Line Outlook
MIDNIGHTTRADER - Updated 1 hour ago
12:23 PM EST, 12/14/2022 (MT Newswires) -- Delta Air Lines (DAL) on Wednesday guided for 2023 earnings above Wall Street's estimates and raised its fourth-quarter profit outlook as demand for air travel remained strong despite a broadly weaker consumer environment.
Delta expects adjusted per-share earnings of $5 to $6 next year, versus the consensus on Capital IQ for $4.79. Revenue growth is pegged at 15% to 20% year over year. The Street's call is for $52.32 billion in sales.
The airline is seeing "strong" travel demand that is "sustainable," Chief Executive Officer Ed Bastian said on a conference call with analysts. He said the COVID-19 pandemic resulted in $300 billion of lost revenue for the wider industry, and "some of it will" come back over "several years."
"Travel patterns have held up well during off-peak" while advanced bookings for summer are 80% US-based, President Glen Hauenstein told analysts. He said "we're in the recession in Europe" and making it through the winter would bode "really well for our summer peak."
For the fourth quarter, the company expects adjusted EPS of $1.35 to $1.40, up from $1 to $1.25 previously anticipated and market expectations for $1.15. Revenue is seen growing 7% to 8% versus 2019 levels, compared with the company's prior forecast of 5% to 9% growth. The Street's call is for $12.80 billion in sales.
The airline anticipates reporting adjusted EPS of $3.07 to $3.12 this year on $45.5 billion to $45.6 billion in revenue, versus consensus estimates for $2.88 and $49.61 billion, respectively. The company reiterated its 2024 profit target of more than $7 a share, versus $6.62 modeled by analysts.
Earlier this month, the International Air Transport Association said the global airline industry is expected to return to profitability in 2023. The industry is expected to post a smaller loss this year compared with IATA's June forecast, though Director General Willie Walsh said passenger volume fell "somewhat short" of expectations amid COVID-19 restrictions in China.