Airline stocks fall ahead of earnings rush as cancellations, 5G and higher rates weigh on sentiment
Joe Raedle/Getty Images News
- A confluence of concerns around the U.S. airline industry has the sector heading towards second down day in a row.
- While airline CEOs are vocally calling for the 5G cellular rollout to be delayed once again, investors are also weighing the reality of higher interest rates and the impact of the high rate of flight cancellations over the last month due to weather and staffing shortages. The lowered sentiment on airline names arrives just ahead of the bulk of the earnings season, which started off favorably when Delta guided for profitability in Q2 and beyond.
- Sector watch: American Airlines (AAL -2.7%), Delta Airlines (DAL -1.3%), Southwest Airlines (LUV -0.6%), United Airlines (UAL -1.9%), JetBlue (JBLU -0.4%), Hawaiian Holdings (HA -0.9%), Alaska Air Group (ALK -0.8%), Allegiant Travel (ALGT -2.0%), Spirit Airlines (SAVE -0.7%), Mesa Airlines (MESA -2.6%), SkyWest (SKYW -0.6%), Sun Country Airlines (SNCY -3.9%) and Frontier Group (ULCC -0.8%).
- What to watch: American Airlines (NYSE:AL) reports earnings on January 20 as it looks to snap a streak of six straight EPS misses. Also check out the earnings preview on UAL, which enters the earnings confessional tomorrow.
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Comments (27)
@bet727 yup, this is going to drag on earnings all year. I did some research last year on fuel hedging, and was surprised to find that of the major US airlines, only LUV was doing any. Delta does own a refinery and that may help them out a bit. But the others are unhedged and completely exposed to $100/bbl crude. They'll have no way to deal with it other than raise fares, which I expect them to do, but remember that there is lots of competition particularly from the ultra low cost carriers (Spirit, Frontier, etc.)
@metalhead
Delta's refinery is saving it more than 5 cents/gallon net on jet fuel. Based on what Delta has already posted for the 4th quarter and what AAL guided for, the savings is almost 12%.... the refinery strategy is saving Delta money, far more net-net than LUV is saving via hedges considering they lost hundreds of millions on bad hedges in the end of the last decade.
Delta's refinery is saving it more than 5 cents/gallon net on jet fuel. Based on what Delta has already posted for the 4th quarter and what AAL guided for, the savings is almost 12%.... the refinery strategy is saving Delta money, far more net-net than LUV is saving via hedges considering they lost hundreds of millions on bad hedges in the end of the last decade.
Delta essentially bamboozled investors by highlighting non-GAAP numbers in their Q4 earnings. They get what they deserve for not carefully parsing the report and realizing that on a GAAP basis, Delta lost money in Q4 and will again in Q1, per guidance.Just presuming that Q2 and beyond will be "puppies and kittens" might not be very wise, either.
@metalhead
Delta reported GAAP and adjusted finances so it is completely false to say that they bamboozled anyone. If you can't read an earnings release, you probably shouldn't be investing in individual stocks.
Delta reported GAAP and adjusted finances so it is completely false to say that they bamboozled anyone. If you can't read an earnings release, you probably shouldn't be investing in individual stocks.
@metalhead
you are dead wrong. It is THE VERY FIRST SENTENCE.ir.delta.com/...Jan 13, 2022
December quarter 2021 GAAP pre-tax loss of $395 million, pre-tax margin of (4.2) percent and loss per share of $0.64 on total operating revenue of $9.5 billion
December quarter 2021 adjusted pre-tax income of $170 million, adjusted pre-tax margin of 2.0 percent and adjusted earnings per diluted share of $0.22 on adjusted operating revenue of $8.4 billion
Full year 2021 GAAP pre-tax income of $398 million, on total operating revenue of $29.9 billion
Full year 2021 adjusted pre-tax loss of $3.4 billion on adjusted operating revenue of $26.7 billion
ATLANTA, Jan. 13, 2022 /PRNewswire/ -- Delta Air Lines (NYSE:DAL) today reported financial results for the December quarter and full year 2021 and provided its outlook for the March quarter 2022. Highlights of the December quarter and full year 2021 results, including both GAAP and adjusted metrics, are on page five and are incorporated here.
you are dead wrong. It is THE VERY FIRST SENTENCE.ir.delta.com/...Jan 13, 2022
December quarter 2021 GAAP pre-tax loss of $395 million, pre-tax margin of (4.2) percent and loss per share of $0.64 on total operating revenue of $9.5 billion
December quarter 2021 adjusted pre-tax income of $170 million, adjusted pre-tax margin of 2.0 percent and adjusted earnings per diluted share of $0.22 on adjusted operating revenue of $8.4 billion
Full year 2021 GAAP pre-tax income of $398 million, on total operating revenue of $29.9 billion
Full year 2021 adjusted pre-tax loss of $3.4 billion on adjusted operating revenue of $26.7 billion
ATLANTA, Jan. 13, 2022 /PRNewswire/ -- Delta Air Lines (NYSE:DAL) today reported financial results for the December quarter and full year 2021 and provided its outlook for the March quarter 2022. Highlights of the December quarter and full year 2021 results, including both GAAP and adjusted metrics, are on page five and are incorporated here.
looks like T and VZ have agreed not to turn on C band 5G near some US airports on Wed.
there is no company that is willing to be responsible for the delay or cancellation of flights, or let alone a safety incident involving an aircraft.
there is no company that is willing to be responsible for the delay or cancellation of flights, or let alone a safety incident involving an aircraft.