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Delta Air Lines News: Rising Costs Send DAL Stock 5% Lower

DAL also narrowed its Q3 EPS guidance

Delta Air Lines (NYSE:DAL) news for Wednesday concerning an update for its third quarter of 2019 has DAL stock down.

Delta Air Lines News: Rising Costs Send DAL Stock 5% Lower
Source: Markus Mainka

This update from the airline company has it narrowing its outlook for the third quarter of the year. This includes a new adjusted earnings per share estimate of $2.20 to $2.30. The previous range was $2.10 to $2.40. The mid point of this new range is below Wall Street’s per-share earnings estimate of $2.27 for the quarter. It is also expecting pre-tax margin of approximately 15.5% for the quarter.

To go along with this, the Delta Air Lines news release notes that it is expecting to see higher costs during the quarter than initially thought. This includes non-fuel unit costs increasing 2.5% from the same time last year. It was previously expecting this to be up between 1% and 2% from the third quarter of 2018.

Delta Air Lines notes that there are a few reasons that non-fuel unit costs are going up further than previously expected. These reasons include employee costs, record passenger volumes and weather.

According to the Delta Air Lines new release, the company is also now expecting its non-fuel unit costs for the full year of 2019 to be up 2% from 2018. It contributes this increase to expected pressure during the fourth quarter from changes to actuarial assumptions, employee wage increases and maintenance timing.

DAL stock was down 5.15% as of Monday afternoon. However, the stock is still up 13.82% since the start of the year.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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