Delta Air shares gain the most in a week on Thursday, carrier’s first-quarter earnings beat, operating revenue misses estimates

April 13, 2018 9:27 am

Shares of Delta Air Lines Inc (DAL) gained the most in a week during the trading session in New York on Thursday, as the carrier’s first-quarter earnings topped Wall Street’s consensus estimate. At the same time, the airline’s total unit revenue rose for a fourth consecutive quarter, supported by strong results in all geographic regions.

Delta Air shares closed higher for the first time in the past five trading sessions on Thursday. It has also been the sharpest daily surge since April 3rd. The stock went up 2.93% ($1.51) to $52.98, after touching an intraday high at $53.55, or a price level not seen since April 9th ($53.70).

In the week ended on April 8th the shares of the transportation company lost 3.21% of their market value compared to a week ago, which marked the second drop out of five weeks.

However, due to yesterday’s rebound, the stock has pared its loss to 3.34% so far during the current month, following a 1.69% surge in March. The latter has been the sixth gain out of seven months.

For the entire past year, Delta Air shares rose 13.84% following a 2.96% drop in 2016.

Delta’s adjusted operating revenue went up 8% to $9.76 billion during the first quarter of 2018 compared to the same period a year earlier, supported by a 23% surge in cargo revenue as well as a $78 million rise in total loyalty revenue. In comparison, analysts on average had expected $9.85 billion in operating revenue.

Delta’s total unit revenue, excluding refinery sales, went up 5.0% during the latest quarter from a year ago.

“We are seeing Delta’s best revenue momentum since 2014, with positive domestic unit revenues, improvements in all our international entities, strong demand for corporate travel and double-digit increases in our loyalty revenues”, Delta’s President Glen Hauenstein was quoted as saying in the company’s press release.

“With our solid pipeline of commercial initiatives, delivered with industry-leading Delta service, we expect to maintain this momentum and deliver total revenue growth of 4 to 6 percent for the full year.”

Meanwhile, the airline’s total adjusted operating expenditures rose by $817 million in Q1 due to higher fuel costs, higher depreciation expense as well as due to investments in employee wages and profit sharing.

As a result, the company’s adjusted pre-tax income shrank by $104 million compared to a year ago to reach $676 million during the first quarter. Revenue growth was offset by rising fuel and other costs, including a $44 million impact from severe weather conditions.

Delta’s earnings per share were reported at $0.74 in Q1, which topped the median analyst estimate pointing to earnings of $0.73 per share.

The airline now expects its earnings per share to be within the $1.80-$2.00 range during the second quarter, while its unit revenue to increase between 3% and 5% year-on-year. In comparison, analysts on average project earnings of $1.92 per share in Q2.

According to CNN Money, the 18 analysts, offering 12-month forecasts regarding Delta Air’s stock price, have a median target of $70.50, with a high estimate of $100.00 and a low estimate of $65.00. The median estimate is a 33.07% surge compared to the closing price of $52.98 on April 12th.

The same media also reported that 17 out of 20 surveyed investment analysts had rated Delta Air’s stock as “Buy”, while 3 – as “Outperform”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the Delta Air stock are presented as follows:

R1 – $53.12
R2 – $53.26
R3 (Range Resistance – Sell) – $53.41
R4 (Long Breakout) – $53.83
R5 (Breakout Target 1) – $54.33
R6 (Breakout Target 2) – $54.56

S1 – $52.84
S2 – $52.70
S3 (Range Support – Buy) – $52.55
S4 (Short Breakout) – $52.13
S5 (Breakout Target 1) – $51.63
S6 (Breakout Target 2) – $51.40

By using the traditional method of calculation, the weekly levels of importance for Delta Air Lines Inc (DAL) are presented as follows:

Central Pivot Point – $52.88
R1 – $54.80
R2 – $56.56
R3 – $58.48
R4 – $60.41

S1 – $51.12
S2 – $49.20
S3 – $47.44
S4 – $45.69

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