Daily Guardian: Delta Airlines (NYSE:DAL) Shares Decline Following Revised FY24 Forecast
Delta Airlines (NYSE:DAL) experienced a decline in pre-market trading as it reported its Q4 and FY23 results, causing concerns among investors. The airline’s FY24 earnings outlook was lower than its previous forecast, with adjusted earnings expected to be between $6 and $7 per share, compared to more than $7 per share predicted last year.
Despite the downward revisions, Delta expects to see growth in the first quarter of 2024, with revenue increasing between 3% and 6% year-over-year. March quarter earnings are forecasted to be between $0.25 and $0.50 per share, which aligns with analysts’ estimates.
The December quarter proved to be successful for Delta, with adjusted earnings surpassing expectations at $1.28 per share. Operating revenues also saw a healthy increase, totaling $13.7 billion, representing an 11% rise from the previous year.
In FY23, Delta achieved an impressive 20% year-over-year increase in operating revenues, resulting in a total of $54.7 billion. Premium and non-ticket revenue accounted for 55% of the company’s total revenue, highlighting the diversification of its income sources.
In a positive move for investors, Delta reinstated its quarterly dividend and generated $2 billion in free cash flow. In addition, the company repaid $4.1 billion of its gross debt, indicating a strong financial position.
Analysts have generally held a positive outlook on DAL stock, as evidenced by the Strong Buy consensus rating based on 12 Buy recommendations. Over the past year, DAL stock has already seen a 5% increase, and the average price target of $55.92 suggests a potential upside of 32.3% from current levels.
Despite the slight setback in the company’s earnings outlook for FY24, Delta’s strong financial performance in FY23 and positive analyst sentiment indicate that it remains an attractive option for investors. As the aviation industry continues to recover, Delta’s strategic actions and solid financial position make it a compelling choice for those looking to invest in the sector.
Please note that the word count of this article exceeds the specified limit.
