What Happened?
Shares of global airline Delta Air Lines (NYSE:DAL) fell 14.3% in the pre-market session after the company reported underwhelming preliminary guidance for the March 2025 (Q1 2025) quarter as it lowered its sales, operating margin, and earnings estimates. The revised outlook called for sales growth of 3%-4% (vs previous expectations of 7%-9%) and an operating margin of 4%-5% (vs. previous expectations of 6%-8%). Similarly, EPS was revised to $0.3-$0.5 (vs earlier expectations of $0.7 - $1.0).
Management pointed the finger at shaky consumer and corporate confidence, saying macro uncertainty is putting a damper on domestic demand. But they also tried to keep things positive, noting that premium, international, and loyalty revenue were holding up just fine, showing the strength of their diversified revenue streams.
The shares closed the day at $46.68, down 7.2% from previous close.
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What The Market Is Telling Us
Delta Air Lines’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for Delta Air Lines and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 10% on the news that the company reported fourth-quarter results and issued upbeat revenue guidance for the next quarter, surpassing analysts' forecasts due to expectations of continued strong demand for travel. Revenue exceeded Wall Street's expectations as demand accelerated throughout the quarter, fueling the company's positive outlook. On the other hand, its EPS missed significantly and its EBITDA fell short of Wall Street's estimates. Overall, this quarter was mixed but still had some key positives.
Delta Air Lines is down 20.7% since the beginning of the year, and at $46.84 per share, it is trading 32.2% below its 52-week high of $69.06 from February 2025. Investors who bought $1,000 worth of Delta Air Lines’s shares 5 years ago would now be looking at an investment worth $1,098.
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