Delta Air Lines (DAL, Financial) experienced a significant pre-market stock drop of 10.4% after the company halved its profit forecast for the first quarter. This downward revision has sparked concerns about the overall profitability outlook for the airline industry, leading to widespread declines in airline stocks.
Following Delta's announcement, United Airlines saw its pre-market shares fall by 7.4%, and American Airlines experienced a 5.5% drop. European airline stocks were also affected, with Germany's Lufthansa and Air France-KLM seeing declines between 2% and 3.5%.
Delta Air Lines reduced its first-quarter earnings per share estimate to a range of 30 to 50 cents, down from a previous estimate of up to $1. This revision reflects a weakening travel demand, highlighting economic concerns impacting consumer spending. Additionally, Delta lowered its revenue and operating margin forecasts, contrasting sharply with the optimistic expectations at the beginning of the year when CEO Ed Bastian stated that the demand environment was stable.
Recently, Delta pointed out that the U.S. airline industry is facing challenges due to economic fluctuations and flight safety concerns, further impacting investor sentiment and stock performance.
