Delta Air Lines (DAL) stock tumbles on revenue miss

Delta Air Lines (NYSE: DAL) experienced a significant 8% decline in its share price following the announcement of its second-quarter financial results, which revealed a revenue shortfall despite matching analyst expectations for adjusted earnings per share (EPS).

The company reported an adjusted EPS of $2.36, in line with the consensus estimate, but revenue for the quarter was slightly below expectations at $15.4 billion compared to the anticipated $15.47 billion.

Despite the miss, the Atlanta-based carrier highlighted a record June quarter revenue, which was 5.4% higher than the same period in 2023. The company's operating margin stood at a robust 14.7%, and it generated strong cash flow, allowing for continued debt repayment and a significant 50% increase in its dividend payment starting in the September quarter.

Delta's CEO, Ed Bastian, expressed confidence in the company's ability to meet its full-year guidance for an EPS of $6 to $7 and free cash flow of $3 to $4 billion.

Despite the positive performance metrics, investors reacted negatively to the revenue miss, driving the stock down significantly. The company's outlook for the September quarter includes an expected pre-tax profit of approximately $1.5 billion and a double-digit operating margin.

For the full year 2024, Delta's guidance remains unchanged, with an EPS forecast of $6 to $7, compared to the analyst consensus midpoint of $6.58. The airline expects revenue growth of 2% to 4% for the third quarter, with a projected operating margin of 11% to 13% and an EPS of $1.70 to $2.00.

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