What Happened?
Shares of global airline Delta Air Lines (NYSE:DAL) jumped 10% in the morning session after the company reported fourth-quarter results and issued upbeat revenue guidance for the next quarter, surpassing analysts' forecasts due to expectations of continued strong demand for travel. Revenue exceeded Wall Street's expectations as demand accelerated throughout the quarter, fueling the company's positive outlook. On the other hand, its EPS missed significantly and its EBITDA fell short of Wall Street's estimates. Overall, this quarter was mixed but still had some key positives.
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What The Market Is Telling Us
Delta Air Lines’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 5.4% on the news that fellow carrier, United Airlines, reported strong third-quarter earnings results that exceeded analysts' revenue and EPS expectations. UAL called out improved sales trends signaling that the industry may be at a turning point as unprofitable capacity dwindled. This reduction suggests that airlines are scaling back on underperforming flights or routes, amid improving competitive pressure. Overall, the results bode well for air travel as the industry rebounds from the pandemic-induced downturn.
Delta Air Lines is up 13.9% since the beginning of the year, and at $67.31 per share, has set a new 52-week high. Investors who bought $1,000 worth of Delta Air Lines’s shares 5 years ago would now be looking at an investment worth $1,136.
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