Delta Air Lines Inc (NYSE:DAL) shares slipped on disappointing fourth quarter guidance, with the airline warning it expects reduced travel demand around the US election.
It expects the November 5 election to result in a 1 percentage point hit on its unit revenue in the December quarter.
Revenue growth is expected to be between 2% and 4% from the year-ago quarter on capacity growth of 3% to 4%. Analysts expect revenue up 2.7% at $14.6 billion.
Delta projected earnings per share (EPS) in the range of $1.60 to $1.85, at the midpoint lower than the $1.82 Wall Street consensus.
"With an improving industry backdrop and strong demand for travel on Delta, we are positioned to finish the year strong,” Delta CEO Ed Bastian said in a statement.
“We expect our December quarter pre-tax profit to grow 30% over last year to $1.4 billion, which would mark one of the most profitable fourth quarters in our history."
For the third quarter, Delta’s earnings also disappointed with EPS of $1.50 missing estimates of $1.56.
Revenue of $14.6 billion was short of the $14.7 billion expected, in part due to a $380 million impact from the CrowdStrike-caused outage which caused the airline to cancel 7,000 flights over five days.
The impact was driven by customer refunds and providing compensation in the form of cash and SkyMiles, however, its fuel expenses were $50 million lower due to the flight cancellations.
Shares of Delta traded down 0.9% at about $50 Thursday morning.