$Delta Air Lines (DAL.US)$The second-quarter financial report will be announced before the market opens on Thursday, July 11th. The stock fell 2.89% on the last trading day and has risen 15% so far this year. Here are the expectations for the financial report:
Analysts expect Q2 2024 revenue to be $15.47 billion, compared to $15.6 billion in the same period last year. Q1 revenue grew 8% YoY to reach $13.7 billion. Analysts unanimously expect EPS of $2.36, compared to an adjusted EPS of $2.68 in the same period last year. Q1 adjusted EPS was $0.45.
In Q2 2024, Delta Air Lines expects a revenue growth rate of 5%-7%. Adjusted EPS is expected to be between $2.20 and $2.50, and operating margin is expected to be 14%-15%. Capacity growth rate is 6%-7%, and non-fuel unit costs are expected to be 2% higher than last year.
Delta Air Lines saw strong demand trends in Q1 and achieved record revenue and profitability levels, reaching the upper end of its performance guidance. In addition, with the return of large corporate clients, strong demand for international travel, and a rebound in corporate travel demand, Q2 is expected to build on this strong base.
CEO Ed Bastian pointed out before the release of the financial report that air travel demand is still strong, with customers' financial conditions being good, and travel being a top priority. The company said during its Q1 earnings call that robust travel demand will continue into Q2.
The company expects unit revenue for US domestic routes to remain stable in Q2. In addition, the company expects strong performance on transatlantic routes, and unit revenue is expected to benefit from the improvement in corporate travel trends. For Latin America, unfavorable factors in the short-haul leisure market are expected to put pressure on unit revenue, but it is expected to improve in the second half of the year.
In addition, Delta Air Lines remains optimistic about corporate travel. As mentioned during the earnings call, according to a survey, 90% of companies plan to maintain or increase their travel volume in Q2, which makes Delta Air Lines expected to achieve a record corporate revenue in the second half of 2024.
Overall, as a first-class operator, Delta Air Lines has diversified revenue streams and cash flows, and will continue to benefit from a high-quality consumer mix. Analysts hope that Delta Air Lines will reiterate its guidance for 2024 EPS of $6.00 to $7.00 and free cash flow of $3 billion to $4 billion. If the updated performance guidance brings positive or negative surprises, it may serve as a catalyst for the stock price of the entire aviation industry.
According to options trading, the stock price may fluctuate by 6% after the financial report is released. After the last financial report was released, delta air lines' stock price fell by 2.3%. It is noteworthy that,$United Airlines (UAL.US)$, $Copa Holdings (CPA.US)$ and $Alaska Air (ALK.US)$They are the three airlines with the highest correlation to Delta Air Lines after the company's financial report was released.
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