Delta Air Lines Shares Down 5.54% on Monday's Trading: Here's Why

Core Viewpoint - Delta Air Lines, Inc. (DAL) shares declined by 5.54% to $50.33 due to a bearish financial outlook for Q1 2025, which was announced just before a presentation at the J.P. Morgan Industrials Conference [1]. Financial Outlook - DAL has lowered its Q1 2025 adjusted earnings per share (EPS) guidance to a range of 30-50 cents, down from the previous range of 70 cents to$1 per share. The Zacks Consensus Estimate for Q1 EPS is 84 cents [2]. - The adjusted operating margin for the March quarter is now expected to be between 4-5%, a decrease from the prior guidance of 6-8% [2]. - Total revenues (adjusted) for Q1 2025 are now expected to increase by 3-4% compared to Q1 2024, down from the previous expectation of 7-9% year-over-year growth. The Zacks Consensus Estimate for Q1 2025 revenues reflects a year-over-year increase of 4.4% [3]. Market Conditions - The disappointing guidance is attributed to a reduction in consumer and corporate confidence due to increased macroeconomic uncertainty, leading to softness in domestic demand [4]. - Despite the challenges, premium, international, and loyalty revenue growth trends remain consistent, indicating the strength of DAL's diversified revenue base [4]. External Factors - DAL's stock performance has been negatively impacted by recent tariff-related tensions, particularly a 10% tariff on energy resources from Canada, which has led to higher fuel prices and reduced profit margins [5]. - The ongoing trade war between the United States and its major trading partners, including Canada, Mexico, and China, is expected to further affect DAL's business [6]. - Additionally, lawsuits against Delta and its subsidiary, Endeavor Air, following a crash incident, have contributed to the decline in DAL shares [6]. Stock Performance - Over the past month, DAL shares have dropped by 27.1%, compared to an 11.5% decline in the Zacks Airline industry and a 7.5% loss in the S&P 500 index [7].