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Delta Air Lines slashed its sales and earnings expectations for the first quarter by at least half, blaming a decline in consumer and corporate confidence triggered by economic “uncertainty” for hitting US demand.
The Atlanta-based group’s profit warning after the market close on Monday was in stark contrast to the guidance it provided two months ago, in which it painted a much more upbeat outlook than rivals owing to expectations that passengers’ continued willingness to pay for premium seats would push it to record profits this year.
Delta’s cautious outlook, which sent its shares tumbling, is one of the clearest signs of how Donald Trump’s tariffs are eroding consumer and business sentiment. Wall Street stocks dropped sharply on Monday after the president shrugged off recession concerns even as Wall Street banks cut their US economic forecasts.
Delta on Monday said it now expected total revenue growth of 3 per cent to 4 per cent in the first three months of this year, down from its January 10 guidance of 7 per cent to 9 per cent growth. Earnings are now expected to be in the range of 30-50 cents a share this quarter, down from the earlier forecast of 70 cents to $1 a share.
Delta said: “The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in domestic demand.”
The carrier said, though, that revenue growth trends for premium, international and loyalty were “consistent with expectations and reflect the resilience of Delta’s diversified revenue base”.
Delta shares were down more than 12 per cent in after-hours trading.
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