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Delta Hurt by Coronavirus-led Dwindling Air Travel Demand
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We recently issued an updated report on Delta Air Lines, Inc. (DAL - Free Report) . Crippling air travel demand and eventually dwindling passenger revenues are currently a major headwind. Due to the current unrest caused by the COVID-19 pandemic, the carrier has reduced its capacity by at least 80% in April with 115,000 flight cancellations.
With the company losing approximately $60 million in cash each day, its first-quarter 2020 performance has been significantly affected. The same is expected to hurt the carrier’s second-quarter results (April-June) further. The company expects its second-quarter revenues to shrink as much as 90% in the face of plummeting passenger revenues.
With revenues being dented due to extremely low passenger traffic, Delta is looking to cut costs to drive the bottom line. Evidently, the carrier deferred all plans pertaining to capital spending. Moreover, the carrier has put a pause on hiring and is offering voluntary leave options to employees. Apart from accelerating retirement plans of the older planes in its fleet, Delta aims to downsize its active fleet.
Negative Earnings & Downward Revision
The pessimism surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current year earnings has been revised downward by 90% to 11 cents in the past 60 days.
Notably, earnings are anticipated to decline 77.3% for 2020.
Zacks Rank and Stocks to Consider
Currently, Delta Air Lines carries a Zacks Rank #5 (Strong Sell).
Long-term (three to five years) expected earnings per share growth rate for GATX, Teekay Tankers and Höegh LNG is pegged at 15%, 3% and 8.5%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Delta Hurt by Coronavirus-led Dwindling Air Travel Demand
We recently issued an updated report on Delta Air Lines, Inc. (DAL - Free Report) . Crippling air travel demand and eventually dwindling passenger revenues are currently a major headwind. Due to the current unrest caused by the COVID-19 pandemic, the carrier has reduced its capacity by at least 80% in April with 115,000 flight cancellations.
Delta Air Lines, Inc. Price
Delta Air Lines, Inc. price | Delta Air Lines, Inc. Quote
With the company losing approximately $60 million in cash each day, its first-quarter 2020 performance has been significantly affected. The same is expected to hurt the carrier’s second-quarter results (April-June) further. The company expects its second-quarter revenues to shrink as much as 90% in the face of plummeting passenger revenues.
With revenues being dented due to extremely low passenger traffic, Delta is looking to cut costs to drive the bottom line. Evidently, the carrier deferred all plans pertaining to capital spending. Moreover, the carrier has put a pause on hiring and is offering voluntary leave options to employees. Apart from accelerating retirement plans of the older planes in its fleet, Delta aims to downsize its active fleet.
Negative Earnings & Downward Revision
The pessimism surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current year earnings has been revised downward by 90% to 11 cents in the past 60 days.
Notably, earnings are anticipated to decline 77.3% for 2020.
Zacks Rank and Stocks to Consider
Currently, Delta Air Lines carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Transportation sector are GATX Corporation (GATX - Free Report) , Teekay Tankers Ltd. (TNK - Free Report) and Höegh LNG Partners LP . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term (three to five years) expected earnings per share growth rate for GATX, Teekay Tankers and Höegh LNG is pegged at 15%, 3% and 8.5%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>