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What's in Store for Coronavirus-Hit Delta's (DAL) Q3 Earnings?
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Delta Air Lines (DAL - Free Report) is scheduled to report third-quarter 2020 results on Oct 13, before the market opens.
The company has an impressive earnings record. Its bottom line outpaced the Zacks Consensus Estimate in three of the last four quarters (missing in the remaining one). The average beat being 10.3%.
For the to-be-reported quarter as well, estimate revision for the bottom line does not represent a rosy picture. Notably, the Zacks Consensus Estimate for third-quarter bottom line has widened to a loss of $3.1 per share from $2.13 loss 90 days ago.
Against this backdrop, let’s delve deeper to find out the factors that might have impacted Delta’s performance in the September quarter.
Similar to the second quarter, Delta’s third-quarter performance is likely to have been dented by coronavirus-induced weak passenger revenues as air-travel demand remains tepid. The spike in coronavirus cases in some parts of the United States during the three-month period under consideration (July-September) is likely to have affected the already bleak air-travel demand, thereby hurting passenger revenues further.
Reflecting the prevalent gloomy scenario, the Zacks Consensus Estimate for passenger revenues indicates a 78.3% plunge from the number reported in the year-ago quarter. To mitigate the extreme demand depression, the carrier is trimming its capacity. The Zacks Consensus Estimate for consolidated available seat miles (a measure of capacity) implies a 66.3% slump from the number reported in the year-earlier quarter. However, the Zacks Consensus Estimate for traffic (measured in revenue passenger miles) suggests an 81.3% decline from the prior-year quarter’s reported figure.
With traffic declining at a faster rate than capacity cutbacks, load factor (% of seats filled by passengers) is likely to have taken a beating in the third quarter. Notably, the Zacks Consensus Estimate for Delta’s third-quarter 2020 consolidated passenger load factor stands at a dismal 50%, hinting at a decline from 88% reported in third-quarter 2019. Also, the Zacks Consensus Estimate for third-quarter passenger revenues per available seat miles (PRASM: a key measure of unit revenues) is pegged at 9.76 cents, implying a 35.2% reduction from the figure reported in the year-ago quarter.
However, fuel prices are still below the year-ago levels despite the recent uptrend. Against this backdrop, decreased fuel prices might reflect on Delta’s bottom line. Notably, the Zacks Consensus Estimate for average fuel price per gallon (adjusted) suggests a 33.7% drop from the figure reported in the September quarter of 2019. Moreover, with a significant portion of the fleet remaining grounded or under-utilized due to the coronavirus-led bleak demand scenario, the carrier’s fuel gallon consumption is likely to have been moderate in the September quarter, thereby reducing its fuel expenditure. This, in turn, might have boosted the airline’s bottom-line performance. Notably, the Zacks Consensus Estimate for fuel gallons consumed (on a consolidated basis) indicates a 66.1% reduction from the figure reported in the year-ago quarter.
What Does the Zacks Model Unveil?
The proven Zacks model does not predict a bottom-line beat for Delta this time around. Notably, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise as elaborated below. However, this is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Delta has an Earnings ESP of -5.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Delta carries a Zacks Rank #4 (Sell), currently.
Highlights of Q2
In the last reported quarter, the company incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of $3.97. However, Delta reported earnings of $2.35 per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation (UNP - Free Report) , Kansas City Southern and Norfolk Southern Corporation (NSC - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Union Pacific has an Earnings ESP of +2.05% and is Zacks #3 Ranked, presently. The company will release third-quarter 2020 results on Oct 22.
Kansas City Southern has an Earnings ESP of +2.50% and a Zacks Rank of 3 at present. The company will release third-quarter 2020 results on Oct 16.
Norfolk Southern has an Earnings ESP of +2.09% and is currently a #3 Ranked player. The company will release third-quarter 2020 results on Oct 28.
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Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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What's in Store for Coronavirus-Hit Delta's (DAL) Q3 Earnings?
Delta Air Lines (DAL - Free Report) is scheduled to report third-quarter 2020 results on Oct 13, before the market opens.
The company has an impressive earnings record. Its bottom line outpaced the Zacks Consensus Estimate in three of the last four quarters (missing in the remaining one). The average beat being 10.3%.
Delta Air Lines, Inc. Price and EPS Surprise
Delta Air Lines, Inc. price-eps-surprise | Delta Air Lines, Inc. Quote
For the to-be-reported quarter as well, estimate revision for the bottom line does not represent a rosy picture. Notably, the Zacks Consensus Estimate for third-quarter bottom line has widened to a loss of $3.1 per share from $2.13 loss 90 days ago.
Against this backdrop, let’s delve deeper to find out the factors that might have impacted Delta’s performance in the September quarter.
Similar to the second quarter, Delta’s third-quarter performance is likely to have been dented by coronavirus-induced weak passenger revenues as air-travel demand remains tepid. The spike in coronavirus cases in some parts of the United States during the three-month period under consideration (July-September) is likely to have affected the already bleak air-travel demand, thereby hurting passenger revenues further.
Reflecting the prevalent gloomy scenario, the Zacks Consensus Estimate for passenger revenues indicates a 78.3% plunge from the number reported in the year-ago quarter. To mitigate the extreme demand depression, the carrier is trimming its capacity. The Zacks Consensus Estimate for consolidated available seat miles (a measure of capacity) implies a 66.3% slump from the number reported in the year-earlier quarter. However, the Zacks Consensus Estimate for traffic (measured in revenue passenger miles) suggests an 81.3% decline from the prior-year quarter’s reported figure.
With traffic declining at a faster rate than capacity cutbacks, load factor (% of seats filled by passengers) is likely to have taken a beating in the third quarter. Notably, the Zacks Consensus Estimate for Delta’s third-quarter 2020 consolidated passenger load factor stands at a dismal 50%, hinting at a decline from 88% reported in third-quarter 2019. Also, the Zacks Consensus Estimate for third-quarter passenger revenues per available seat miles (PRASM: a key measure of unit revenues) is pegged at 9.76 cents, implying a 35.2% reduction from the figure reported in the year-ago quarter.
However, fuel prices are still below the year-ago levels despite the recent uptrend. Against this backdrop, decreased fuel prices might reflect on Delta’s bottom line. Notably, the Zacks Consensus Estimate for average fuel price per gallon (adjusted) suggests a 33.7% drop from the figure reported in the September quarter of 2019. Moreover, with a significant portion of the fleet remaining grounded or under-utilized due to the coronavirus-led bleak demand scenario, the carrier’s fuel gallon consumption is likely to have been moderate in the September quarter, thereby reducing its fuel expenditure. This, in turn, might have boosted the airline’s bottom-line performance. Notably, the Zacks Consensus Estimate for fuel gallons consumed (on a consolidated basis) indicates a 66.1% reduction from the figure reported in the year-ago quarter.
What Does the Zacks Model Unveil?
The proven Zacks model does not predict a bottom-line beat for Delta this time around. Notably, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise as elaborated below. However, this is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Delta has an Earnings ESP of -5.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Delta carries a Zacks Rank #4 (Sell), currently.
Highlights of Q2
In the last reported quarter, the company incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of $3.97. However, Delta reported earnings of $2.35 per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation (UNP - Free Report) , Kansas City Southern and Norfolk Southern Corporation (NSC - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Union Pacific has an Earnings ESP of +2.05% and is Zacks #3 Ranked, presently. The company will release third-quarter 2020 results on Oct 22.
Kansas City Southern has an Earnings ESP of +2.50% and a Zacks Rank of 3 at present. The company will release third-quarter 2020 results on Oct 16.
Norfolk Southern has an Earnings ESP of +2.09% and is currently a #3 Ranked player. The company will release third-quarter 2020 results on Oct 28.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>