Delta Air Lines Reveals Disappointing Fourth-Quarter Guidance, Causing Share Decline

Delta Air Lines has released its earnings guidance for the current quarter, falling short of analysts’ expectations as the airline deals with the repercussions of a summer computer network outage and pricing pressures from overcapacity.

The company now anticipates fourth-quarter adjusted earnings per share to fall between $1.60 and $1.85, below Wall Street’s estimate of $1.78 at the midpoint.

In the same timeframe, total revenue is projected to increase by 2% to 4%. Delta’s President, Glen Hauenstein, noted that industry supply growth trends are beginning to “rationalize.” Investors have been concerned about the recent overcapacity affecting Delta and its competitors, which has led to lower fare prices.

Hauenstein mentioned that holiday bookings remain “strong,” although the airline expects a 1 percentage point decrease in the number due to reduced travel demand surrounding the upcoming US election.

Following the announcement, shares of Atlanta-based Delta saw a decline in premarket trading.

In July, a major system-wide failure caused by a problematic update from a cybersecurity firm led to significant flight cancellations, with Delta experiencing a substantial impact—canceling 7,000 flights over five days.

The company estimated the direct financial fallout from the incident at approximately $380 million, largely from refunds issued to customers in the form of cash and frequent flyer miles. Non-fuel expenses related to the outage totaled $170 million, while fuel costs were reduced by $50 million due to the cancellations.

The third-quarter earnings per share were affected by a $0.45 decrease linked to the outage. However, Delta indicated that excluding the impact of the incident, its annual adjusted income is expected to be around the midpoint of its guidance range of $6 to $7 per share.

For the September quarter, Delta reported adjusted earnings per share of $1.50, down from $2.03 during the same period last year. Analysts had forecasted earnings of $1.52 per share. The quarterly adjusted revenue reached $14.59 billion, slightly below the anticipated $14.65 billion.