Earnings Spotlight - Delta Airlines
Earnings season for the first quarter of 2024 is officially set to kick off in the second week of April 2024! During earnings season, many companies share whether their earnings per share and revenue numbers meet analyst's projections. This can be a wild ride for some stocks, depending on whether they hit, beat, or miss expectations.
We recently added a new Earnings tool to the OA Labs section of the platform that shows analyst’s expectations, stats covering the stock’s historical earnings results, the average move up or down for the stock after a beat or miss (1 day and 5 days after), and many other useful stats to help us make more informed trading decisions across earnings announcements.
Delta Airlines (DAL)
Today, we’re going to do a pre-report breakdown of Delta Airlines (DAL). Their next earnings announcement is Wednesday, April 10th, before the open. Their first earnings report of the year is for the fiscal quarter ending March 2024.
According to the stats, DAL has a strong track record of beating earnings estimates. With a 60% earnings per share (EPS) beat and 80% revenue beat over the past 20 earnings reports, DAL has outperformed analyst expectations more than half the time. DAL has beat estimates for both EPS and revenue 55% of earnings reports in the last five years while missing on both only 15% of the time. In the last year, DAL has beat projections by an average of 3%.
For their last earnings report in January 2024, DAL reported an EPS of $1.28 on revenue of $14.22 billion, surpassing estimates by 9.88%.
View all DAL earnings historical stats for the past 5 years in Option Alpha
DAL earnings projections and estimates
- Consensus estimate for DAL earnings is $0.35 per share on $12.94B revenue
- Analysts project that DAL will beat estimates by 39.17%
DAL earnings historical stats
- DAL beat earnings per share (EPS) estimates 60% of the time in the past five years.
- DAL beat revenue estimates 80% of the time in the past five years.
Earnings analysis key takeaways
In the 20 earnings reports over the last five years, DAL has beat EPS and revenue estimates more than half of its reports. DAL has beat both EPS and revenue projections 11 times (55%) and missed both only three times (15%).
Analysts project that DAL will beat estimates by 39.17%. That exceeds the average beat of 8.6% during the past five years.
DAL’s largest beat was Q3 2021, exceeding expectations by 96.61% in October’s announcement.Â
DAL’s largest miss since 2019 was in July 2022, falling short of projections by -16.59%.
DAL experienced five consecutive quarters missing EPS estimates from Q2 2020 through Q2 2021, likely due to the coronavirus disrupting the travel industry. Since July 2021, DAL has beat expectations 8 out of 11 earnings.
DAL performance post-earnings
Delta Airlines, Inc outperforming projections has not led to consistent short-term gains in DAL’s stock price. Recent price action indicates a bearish trend in the stock’s performance post-earnings release. DAL stock price has declined the day after earnings for five consecutive quarters, despite beating estimates on four of those reports.
However, 5-day post-earnings returns have been positive on average, and DAL has closed higher five days later 50% of the time after the last 20 earnings announcements.
DAL average stock performance 1 day after earnings
DAL stock price has averaged -0.99% return one day post-earnings.
DAL average stock performance 5 days after earnings
DAL stock price has averaged +0.21% return five days post-earnings.
DAL options volatility
Examining historical performance against current market dynamics can offer data-driven insights. Using live options data, we can assess Delta Airlines’ implied price move in relation to its historical average move following previous earnings reports.
For example, looking at an at-the-money straddle in DAL for the expiration two days after earnings, the market has priced in a range of ~ $2.70, a 5.74% implied move. As shown above, DAL's average move one day after earnings is +/-3.52%. So, market participants are currently pricing in a move that exceeds the average price action for DAL following earnings.
A long straddle requires DAL's stock price to increase or decrease by at least $2.70 to make money on the trade. Conversely, a short straddle will profit if DAL stays within its implied move.
With the market pricing in a 5.74% move and a historical average of +/- 3.52%, the data suggests an opportunity to capitalize on inflated IV before earnings and an over-expectation of price movement after the announcement.
DAL news headlines
Wall Street projects that DAL will continue its trend of earnings growth. Yahoo Finance estimates “year-over-year increase in earnings on higher revenues.” Similarly, Zacks anticipates year-over-year growth of 0.57% based on 7 analyst’s forecasts for DAL earnings.
Nasdaq.com “expects upbeat passenger volumes to have boosted DAL’s top-line performance." However, "high costs are likely to have hurt the bottom line.”
Oil prices can have a significant impact on airline stocks. “Oil prices have rallied this year,” per CNBC, “ booking three consecutive months of gains.” U.S. crude oil is above $85/barrel, up 19% YTD, but still below the 52-week high of $93.68. Geopolitical tensions in the Middle East and Ukraine will continue influencing oil prices globally.
DAL earnings whisper
Delta Airlines (DAL) enters the first quarter earnings season of 2024 with a strong track record of surpassing analyst expectations. The airline's performance in the upcoming earnings announcement will be closely watched, especially considering the broader economic indicators and sector-specific factors that may influence its financial outcomes.
Wall Street analysts expect earnings and revenue growth, but in recent years strong earnings reports have not always led to an increase in DAL's stock price. Although the data suggests that DAL may beat analyst expectations again, it's important for investors to remember that historical results are not indicative of future results.
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