Delta Air plunges after cut to revenue forecast

Bloomberg

Delta Air Lines Inc plunged the most in more than six years, pulling rivals lower, after disappointing ticket pricing forced the carrier to cut its revenue forecasts for the second time in two months.
Fourth-quarter revenue from each seat flown a mile, or unit revenue, will rise 3 percent from a year earlier, the Atlanta-based airline said in a regulatory filing. Delta previously forecast a 3.5 percent gain.
The news added to investor concerns that weaker pricing and the possibility for slowing global demand from trade wars could weigh on profits this year. The timing and following the busy holiday travel season — may have magnified investors’ alarm, said Savanthi Syth, an analyst at Raymond James Financial Inc.
“We do not believe that the sharp sell-off in the US airline shares beyond general market weakness is warranted, albeit understandable given the optics on a day with ample supply of negative headlines,” she said. Delta’s reduced revenue outlook doesn’t indicate general industry weakness, Syth wrote.
Buckingham Research Group analyst Dan McKenzie agreed, calling Delta’s adjustment “a blip, not a major revenue stumbling block.” The unit-revenue change would reduce fourth-quarter profit by 4 cents from the $1.30 a share previously expected, according to Syth’s estimates. Delta is the first major carrier to comment on December trends.