Delta Airlines Earnings in Question for Q1, 2020

This post has been revised after publishing

Delta Air Lines Announces Webcast 

ATLANTA, April 15, 2020 /PRNewswire/ — Delta Air Lines (NYSE:DAL) will hold a live conference call and webcast to discuss March quarter 2020 financial results at 10:00 a.m. ET, Wed., April 22, 2020.   

A live webcast of this event will be available at  An online replay will be available at the same site shortly after the webcast is complete.

SOURCE Delta Air Lines

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Delta Airlines Earnings in Question

Ed Bastian, Delta’s chief executive officer said in Delta Airlines 2019 annual earnings report “As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75.”

The CEO of one of if not the largest Airline in the world back on January 14 of 2020 released an earning report that was healthy and optimistic with strong growth and new partnerships. Delta has been able to develop a strong system for maintaining cash flow while also being able to expand in investments. They had started projects with Sustainable Aviation Fuels in aims to continue adapting with the demands and desires of the consumer.

Just 3 months ago from today as you can see many airlines were continuing to see travel demands healthy and expected to see strong profit gains for the next quarter that was coming. The outbreak of the Covid-19 Virus has taken a dramatic hit to the airlines.

In a report published by Fox, Bastian said the airline is losing more than $60 million in cash every day and “we still haven’t seen the bottom.” Financial relief for U.S. airlines included in the $2.2 trillion coronavirus stimulus package helped airlines avoid initial layoffs but aren’t a sufficient check against the industry’s bleak short-term outlook, he added.

“We still haven’t seen the bottom.”

Ed Bastian, Delta’s chief executive officer

“We appreciate the decisive action of our nation’s leaders to protect our people,” Bastian said in the letter. “But those funds are not nearly enough. We are expecting our revenue in the second quarter to be down 90 percent. Without the self-help actions we are taking to save costs and raise new financing, that money would be gone by June.”

As this next earnings report is set to come out tomorrow on April 14, 2020, many investors will be looking at this report closely. As one of the first airlines to report earning and being one of the major airlines in the world with a fleet of 913 aircraft currently operating they will be able to set the tone for what is to be expected for the other airlines schedule to release earnings the following week.

With the almost complete shut down of international travel around the world the financial earnings report has great potential to bring great clarity to the current situation. As the world is bracing to see how bad the shocks of this pandemic really are being able to finally see the numbers come in will then bring some resolution.

Delta Airlines (DAL) Earnings

In the chart below we can see the the data displaying the 4 most recent Earnings Reports on the graph in addition to down in the table. For the last Year the company has beat their forecast for Earnings per Share. Revenue has remained high above 10 Billion for all the reports with some signs for growth.

Outlooks from Full Year 2019 Report

Looking back at the 2019 end of year report reading through it this morning there is a lot of optimism and growth projected in the outlook. Of course not being able to predict the future events that occur in the world leads to companies constantly remaining optimistic. Even with this next earnings report coming out we can expect to see some optimism and positive outlook in the writing overall.

What will be important to see is the actual numbers. With concerns of cash running low after a few months many investors will be looking to see how much cash was burned through in the last quarter. This will set a tone to then determine what kind of changes will need to be made to maintain operational during this pandemic.

Full Year Report 2019

A few portions from the Earnings report stuck out as they made strong projections and outlooks for the next quarter. Excepts can be seen below:

Non-fuel unit costs for 2019 increased 2% versus prior year, in line with our long-term cost target and reflecting Delta’s continued investment in our people, product and services,” said Paul Jacobson, Delta’s chief financial officer. “These investments supporting our long-term growth will continue into 2020, and we expect our non-fuel unit costs will increase 2% to 3% for the March quarter and full year.”

“Strong cash generation continues to set Delta apart and enables consistent reinvestment in the business while maintaining cash returns to owners at 70% of free cash flow,” added Jacobson. “We expect to generate free cash
flow of $4 billion again this year, putting us on track to deliver a three-year cumulative free cash flow of over $10 billion by the end of 2020.”

“Our industry-leading operational performance and the unmatched service our people provide are the reasons why more customers than ever are choosing to fly Delta. Investments in reliability, product and service, airports and technology are reshaping customer perception and driving record satisfaction scores and increasing brand preference.” said Glen Hauenstein, Delta’s president. “We delivered $47 billion in revenue in 2019, a more than $3 billion increase when adjusted over prior year, while sustaining a revenue premium to the industry of more than 110%. Demand trends remain healthy and we expect momentum to continue in 2020, with revenue growth of 5% to 7% in the March quarter.”

Delta Airlines Chart (DAL)

For anyone to be able to predict the next move of the price of the stock is not possible.

What we can do is wait to see how this next earning report plays out to then have a clear picture of what we can expect to see the price do. There is a possibility that the market has currently priced in the worst case scenario. Having clear numbers will bring clarity as to what exactly has occurred over these last few weeks in the market.

Trading volume has increased dramatically for the airline has we can see the spikes on the chart rise in size. Today we are still seeing a large portion of sells being placed in the market as the bars are primarily red in the last few trading days. The MACD is showing a bit of a reversal after hitting near a low dip in the first major drop of the price where lows were first created.

Delta will certainly continue to thrive again once the market stabilizes. The main points to consider are what their cash flow statements look like and how they will be able to remain operational with minimal flights until they are able to then ramp up flights again. The question that remains is will Delta see demand levels similar to how they saw them in 2019 or can we expect to see a dramatic reduction in demand as consumers will take time to feel comfortable again traveling.

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