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 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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.