According to Zhītōng Financial News, Delta Air Lines (DAL.US) has released its financial results for the third quarter. Data shows that Q3 adjusted revenue is $14.59 billion, with a year-on-year growth of 0.3%, which is below market expectations. Non-GAAP EPS is $1.5, slightly lower than the average analyst expectation of $1.52.

Delta Air Lines expects profits and sales in the last few months of this year to be below Wall Street's expectations, indicating a slow recovery from the challenging peak summer travel season. The company states that Q4 adjusted EPS will be in the range of $1.60 to $1.85, with the midpoint below the analysts' estimated average of $1.75. Delta Air Lines expects Q4 revenue growth to be between 2% and 4%, while the average analyst expectation is a 4.4% year-on-year growth.

This outlook highlights the obstacles faced by Delta Air Lines and other airlines this summer. This summer, there was an excess of US flight capacity, leading many airlines to compete by reducing ticket prices and canceling flight schedules. In September, unit revenue, which measures demand and fares, only turned positive in some regions. Delta Air Lines was also affected by a technology-related system failure, causing thousands of flights to be canceled within a few days in July.

However, in the three months ending on September 30, Delta Air Lines' net income increased by 15% year-on-year to $1.27 billion, with total revenue increasing by 1% to $15.68 billion. Passenger revenue remained stable compared to last year, but sales of premium services like first class continued to exceed main cabin.

Excess capacity in the US domestic market has restrained ticket prices, but Delta Air Lines President Glen Hauenstein stated that the 'industry supply growth continues to trend reasonably, positioning Delta Air Lines well in the final quarter of this year and 2025.' The company plans to expand capacity by 3% to 4% in the fourth quarter.

After the performance announcement, as of the time of publication, the company's stock price fell by 6% in pre-market trading. Competitors United Airlines (UAL.US) and American Airlines (AAL.US) also saw a decline in their stock prices.

Delta Air Lines CEO Ed Bastian said in an interview that the holiday travel demand appears to be "very strong." However, the airline expects the upcoming US presidential election to result in a 1 percentage point downgrade in its unit revenue guidance for this quarter. He stated: "Every four years, when we go through a US election, due to the level of uncertainty, we always see some pauses on the consumer side. I think any major non-essential spending, especially bulk spending, will be like this."

Impact of Outage

During this period, due to a technical failure by CrowdStrike Holdings (CRWD.US), the company's revenue decreased by approximately 0.5 billion US dollars, with increased costs, aligning with Delta Air Lines' previous expectations. Delta Air Lines reiterated that the July interruption by CrowdStrike had a 45-cent impact on its adjusted earnings per share. Delta Air Lines stated that this event resulted in a 0.38 billion US dollar revenue loss for the company.

The airline stated that after the service disruption affected over 1.3 million customers, it will take legal action against CrowdStrike and Microsoft Corporation (MSFT.US). Delta Air Lines' lawyer stated that about 60% of the company's "mission-critical" applications (including backup systems) rely on Microsoft's Windows operating system and CrowdStrike.

Delta Air Lines subtly adjusted its full-year profit forecast, stating that excluding the impact of CrowdStrike, the adjusted full-year earnings per share are expected to be between 6 US dollars and 7 US dollars. The airline had previously indicated on September 12 that earnings were at or above the midpoint of this range.

Despite summer flight interruptions, Delta Air Lines' stock price has risen by 27% as of Wednesday, outperforming the large cap.

Bastian stated that he cannot speculate on the impact of Hurricane Milton on Delta Air Lines or other airlines. Airlines have increased flights in the past few days to assist with evacuations from Florida, with at least seven airports closed on Wednesday as the storm approaches. He said: "It is impacting some fairly important markets like Orlando, Tampa, and Sarasota. We just need to observe and assess the losses."