Delta joins other airlines in reducing profit projections due to rising costs. Thursday was the day Delta became the latest airline to reduce its profit projections in response to rising fuel prices.
The airline company anticipates recording adjusted per-share earnings of between $1.85 and $2.05, decreasing from an earlier prediction of $2.20 to $2.50. In its earnings report for this quarter, Delta stated that it is paying more for gasoline than planned, but the company also noted that its maintenance costs were more than anticipated.
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Compared to the same period in the prior year, Delta anticipated a decline in unit revenue of between 2% and 3% in the third quarter, an improvement above the earlier projection that sales may fall by as high as 4%. Additionally, the company reaffirmed its forecast for full-year adjusted earnings in the range of $6 to $7 per share.
Because the industry is facing rising expenses at the same time that it is entering a period of decreasing travel demand, the company lowered its quarterly guidance.
American Airlines, Spirit Airlines, and Frontier Airlines warned on Wednesday that increased prices will harm company profits for the summer quarter. Their pessimistic forecasts were in response to statements made by Southwest Airlines and Alaska Airlines, which were also negative.
Thursday’s early trading saw relatively little movement in the price of Delta shares.