Delta Airlines shares plummet after growth forecast adjustment, US rivals dragged down

US airline carriers have seen stock prices fall after Delta adjust revenue growth outlook lower, as investors grow sceptical about the sector.

Delta Airlines Source: Bloomberg

Delta Air Lines share price fell off a cliff on Friday morning, down from $50.08 to fall as far as $45.52 at one point, representing a near 9% decline – its steepest decline in over six years.

Its share price cratered after the US carrier issues a slight downward adjustment to its revenue growth outlook, with total revenue growth for Q4 coming in at 3%, down from the 3.5% it previously had forecasted.

US airlines share prices hit tubulance

Delta wasn’t the only US airline to suffer losses on Friday, with American Airlines down 7% - hitting its lowest level in two and half years of trading.

Meanwhile, United Airlines and Southwest Airlines also saw their share prices hit turbulence, falling 5% and 3% respectively.

US airline earnings season around the corner

The big four US airline carriers all report earnings later this month, with each likely worried about how stock market will react as investors reaction on Friday signals that they have grown sceptical of the sector of late, despite all four-boasting strong profitability for nearly a decade.

Delta returned $560 million to shareholders through dividends and share repurchases in Q4, representing a total of $2.5 billion in 2018.

The more cautious guidance from Delta comes after the airline issued a warning to investors ahead of the new year that it forecasts a ‘slight declaration in global GDP’ in 2019 that has the potential to reduce demand and hurt profits in the process.

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