Delta Shares Soar Following an Upward Revision of Their Outlook, as Travel Demand Ascends.

Delta Shares Take Off After Boosting Outlook as Travel Demand Rises. Shares of Delta Air Lines (DAL) skyrocketed by over 6% in intraday trading on Tuesday, propelled by the carrier's upward revision of its current quarter and full-year guidance, while reaffirming its 2024 outlook. The company attributed this positive development to a surge in customer interest following the COVID-19-induced decline in travel.

Key TakeAway

• Delta shares soared by more than 6% during intraday trading on Tuesday, following the airline's upward revision of its profit and revenue projections for the current quarter and full year.
• The company attributed this optimistic outlook to a surge in customer interest after the decline in travel caused by the COVID-19 pandemic.
• CEO Ed Bastian emphasized that the boost in demand is significant and impactful.

During an investors day presentation, Delta announced that it now expects its second-quarter earnings per share (EPS) to range between $2.25 and $2.50, surpassing the previous estimate of $2. Moreover, the company anticipates a revenue increase of 17% to 18%, exceeding its prior projection of a gain of 15% to 17%.

For the full year, Delta forecasts an EPS of $6, up from the previous range of $5 to $6, accompanied by a revenue growth of 17% to 20% compared to the earlier outlook of a rise of 15% to 20%. Additionally, the company anticipates its operating margin to be at the top end of the projected range of 10% to 12%. Delta predicts a free cash flow of $3 billion, as opposed to the earlier estimate of $2 billion, and a higher return on invested capital (ROIC) of more than 13%, surpassing the previous guidance of low-double digits.

CEO Ed Bastian acknowledged the existence of supply constraints that have affected the industry; however, he emphasized that the demand tailwinds are also real and substantial.

Delta also highlighted its advantage in generating revenue from passengers who opt for upgraded seating. The company stated that premium revenue is expected to reach approximately $19 billion this year, constituting 35% of its total revenue.

Delta shares reached their pinnacle in over a year, trading at an unprecedented altitude. This announcement additionally propelled the shares of competing airlines to surge.

Delta Shares Take Off After Boosting Outlook as Travel Demand Rises