What’s happening: Shares of Delta Air Lines fell on Thursday, after the company released results for its third quarter.
What happened: The airline reported better-than-expected revenues for the latest quarter.
However, Delta missed earnings expectations for the quarter, which weighed on the stock.
How were the results: The Atlanta, Georgia-based company reported some growth in sales for the September quarter.
Why it matters: Delta said its revenues took a $380 million hit from the CrowdStrike-related outage during the quarter.
The company’s total passenger revenues were almost flat at $13.107 billion, while cargo revenues climbed 27% year-over-year to $196 million. Other revenues rose 7% to $2.374 billion in the quarter.
Delta posted an adjusted operating income of $1.373 billion, down from $1.963 billion in the year-ago quarter. Adjusted operating expenses rose by 5% year-over-year to $13.221 billion, while non-fuel costs jumped 10% to $10.13 billion.
Total revenue per available seat mile fell by 3% year-over-year, while the passenger load factor slipped to 87%, from 88% in the year-ago quarter.
“With an improving industry backdrop and strong demand for travel on Delta, we are positioned to finish the year strong. We expect our December quarter pre-tax profit to grow 30 percent over last year to $1.4 billion, which would mark one of the most profitable fourth quarters in our history,” CEO Ed Bastian said.
Delta also said that the US Presidential elections could impact travel demand for two weeks around the election date of November 5, while bookings are likely to show an uptick in the weeks ahead.
Management guided to revenue growth of 2% to 4% and adjusted earnings of $1.60 to $1.85 per share for the fourth quarter.
How shares responded: Shares of Delta Air Lines fell 1.1% to close at $50.29 on Thursday, following the release of quarterly results. The stock has gained around 16% over the past month.
What to watch: Investors will watch the demand for travel during the US Presidential elections. The upcoming holiday season will also remain in focus, which is likely to provide a boost to Delta’s overall results.
Context: The GBP/USD forex pair fell on Thursday, reaching its weakest level in a month.
Details: The Bank of England had held its key interest rate at 5% during its meeting in September, after lowering the rate from a 16-year high of 5.25% in August. Traders widely expect the UK central bank to lower interest rates by 50bps to 4.75% at its meeting next month.
Last week, Bank of England Governor Andrew Bailey said the country’s central bank could announce more aggressive interest rate cuts if inflation remained elevated.
Heightened geopolitical concerns also lent support to safe havens, like the US dollar, which exerted further pressure on the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.1% to 102.99 on Thursday.
The GBP/USD forex pair fell around 0.1% to 1.3060, while the EUR/GBP rose around 0.1% to 0.8376 on Thursday. London’s FTSE 100 slipped 0.07% to close at 8,237.73.
What to watch: Investors await the release of economic data on GDP, balance of trade and industrial production from the UK today. The British economy, which stalled again in July, is expected to expand by 0.2% in August.
Analysts expect industrial production in the UK to grow by 0.2% in August, compared to a 0.8% decline in July. The country’s trade deficit, which widened to £7.51 billion in July, is projected to narrow to £6.7 billion in August.
Other Markets: US trading indices closed lower on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.14%, 0.21% and 0.13%, respectively.
Due to a surge in military spending, Ukraine’s parliament approved the first major tax increase since the full-scale invasion by Russia. The news sent the RUB/USD pair slightly higher in forex trading this morning.
New Zealand’s number of visitor arrivals rose 3.6% year-over-year to 214,300 in August, lending support to the NZD/USD forex pair.
The Bank of Korea cut its base rate by 25 bps to 3.25% at its latest policy meeting, which sent the KRW/USD pair higher in forex trading this morning.
Argentina’s consumer price inflation eased to 3.5% in September, from 4.2% in the previous month, which lent support to the ARS/USD forex pair.
US consumer price index rose 0.2% in September. This came in above market forecasts of 0.1%, which sent the Nasdaq 100 lower by more than 0.1% on Thursday.
Germany’s consumer price index and current account, UK’s goods trade balance, manufacturing production and construction output, Turkey’s current account and retail sales, India’s foreign exchange reserves and industrial output, Mexico’s industrial production, Canada’s unemployment rate, employment change and average hourly earnings, US producer price inflation, University of Michigan consumer sentiment, Baker Hughes total rigs and Baker Hughes oil rigs, Russia’s balance of trade, current account and consumer price index, China’s vehicle sales, as well as South Africa’s SACCI business confidence index.