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Delta Air Lines (NYSE:DAL) inched lower on Wednesday, ahead of its second-quarter results on July 11, before the opening bell, with investors expecting another quarter of robust demand.
Ed Bastian, chief executive of Delta, last month showed optimism about the summer travel season. Bastian said that demand was growing faster on international routes compared to domestic ones.
Despite a shortage of airplanes and furloughed pilots, trade organization Airlines for America is predicting a 6.3% increase in global passengers forecasted to travel this summer.
Additionally, Delta sees a 5% increase to about 3 million passengers, who are forecasted to travel for the Memorial Day weekend.
Regarding the upcoming results, the carrier currently projects its second-quarter adjusted EPS to be between $2.20 and $2.50, along with a 5% to 7% growth in its revenue.
Meanwhile, Wall Street analysts expected Delta to post a quarterly EPS of $2.38 (-11.2% Y/Y) and a revenue of $15.7B (+0.8% Y/Y).
Recently, HSBC started coverage on some U.S. airline stocks like Delta, United, and American with a Buy rating. The UK firm noted that Delta had the strongest competitive positioning at all of its key hubs, where it has deployed more than 50% of its capacity.
In its previous quarterly earnings, Delta topped estimates, recording a 7.8% rise in revenue to a record tally of $13.75 billion. Adjusted operating income was $640 million.
Over the last two years, DAL has beaten EPS estimates 63% of the time and revenue estimates 100% of the time.
Over the last three months, EPS estimates have seen 11 upward revisions and four downward revisions. Revenue estimates have seen five upward revisions and one downward revision.
Since the start of the year, DAL shares have risen about 16%, underperforming the S&P 500 index, which rose about 17% during that period.