Delta Air Lines has revised its forecast for the first quarter, projecting a drop in both earnings and revenue due to a recent dip in consumer and corporate confidence linked to economic uncertainties. As a result, the airline’s shares fell sharply, dropping 13.2% in after-hours trading after a regular session decline of 5.5%. So far, shares have decreased by 16.8% this year.
The Atlanta-based airline adjusted its guidance just a day before a scheduled presentation at the J.P. Morgan Industrials Conference. Delta now anticipates first-quarter revenue growth of just 3% to 4% compared to the previous year, a significant cut from its earlier estimate of a 7% to 9% increase. Earnings per share for the quarter are now expected to fall between 30 cents and 50 cents, down from an earlier projection of 70 cents to $1.
In contrast, just a month ago, Delta reported robust fourth-quarter results that exceeded Wall Street expectations, thanks to strong holiday demand. However, since then, signs of an economic slowdown have emerged, with various reports revealing increased pessimism among consumers and businesses. Notably, indicators from the Federal Reserve Bank of Atlanta suggest that the U.S. economy might already be in decline.
Concerns over the impact of the Trump administration’s tariffs on imports from countries like Canada, Mexico, and China are adding to the uncertainty faced by consumers and businesses alike, contributing to stock market volatility.
This forecast comes on the heels of a troubling incident involving one of Delta’s flights, which experienced a severe malfunction upon landing in Toronto. Fortunately, all 80 passengers onboard survived the event, highlighting the importance of airline safety amidst these financial concerns.
