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Delta Air Lines, Inc. (DAL) - free report >>
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Delta Air Lines, Inc. (DAL) - free report >>
Expeditors International of Washington, Inc. (EXPD) - free report >>
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Delta (DAL) Sees Narrower Revenue Decline & Cash Burn for Q4
At the Baird Industrial Conference held on Nov 10, Delta Air Lines Inc. (DAL - Free Report) revealed its expectations for the fourth quarter of 2020.
The carrier expects total revenues to fall 65-70% year over year in the current quarter due to coronavirus-led weak air-travel demand. However, with travel demand gradually improving, this indicates betterment from the 76% decline in revenues in the third quarter.
For the fourth quarter, capacity is expected to decline 40-45% year over year (considering seat blocks to maintain physical distancing, capacity is estimated to decline approximately 60%).
Delta Air Lines, Inc. Price
Delta Air Lines, Inc. price | Delta Air Lines, Inc. Quote
With significant reduction in capacity and consistent cost-reduction efforts, operating expenses, adjusted, are estimated to drop approximately 50% year over year in the fourth quarter.
Delta estimates cash burn in the range of $10-$12 million per day in the December quarter compared with a daily cash burn of $24 million in the third quarter. The anticipated decline in cash burn is due to improving net sales and reduced costs. The company expects cash breakeven in spring 2021.
Delta expects to end the fourth quarter with liquidity of approximately $16 billion.
Zacks Rank & Key Picks
Delta carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Transportation sector are Landstar System (LSTR - Free Report) , Expeditors International of Washington (EXPD - Free Report) and FedEx Corporation (FDX - Free Report) . While FedEx sports a Zacks Rank #1 (Strong Buy), Landstar and Expeditors carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Landstar, Expeditors and FedEx have gained more than 14%, 13% and 76% so far this year, respectively.
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