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Delta Air Lines on Wednesday lifted its fourth-quarter earnings forecast. They offered an upbeat outlook for next year as it expects travel-hungry customers to fill planes despite mounting economic worries, sending its shares higher. The airline's stock rose 2.6% on Wednesday after the company raised its earnings guidance.
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The carrier raised its 2022 adjusted EPS guidance to $3.07 to $3.12. Analysts surveyed by FactSet were looking for earnings of $2.88 a share. For 2023, Delta Air Lines forecasts a near doubling of adjusted earnings to $5 to $6 a share. The Atlanta-based carrier said it expects profit to nearly double next year. It forecasts an adjusted profit of $5 to $6 per share for 2023, up from an estimated $3.07 to $3.12 per share for this year.
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Delta's Chief Executive Ed Bastian told a gathering of Wall Street analysts that consumers are estimated to spend $30 billion on travel next year and that demand was not likely to wane any time soon. He said Delta's profit goal for next year is about 20% below what the company earned in 2019.
Why it matters
U.S. carriers are enjoying the strongest consumer demand in three years. The reopening of pandemic-closed borders and a strong U.S. dollar are encouraging more Americans to travel overseas, while office reopenings are boosting corporate travel demand. Booming demand has helped carriers mitigate higher fuel and labor costs through higher ticket prices. In contrast, the slowing global economy more recently has led to a fall in oil prices, providing some much-needed relief to airlines.
