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Why Delta Air Lines Stock Fell after Q4 Earnings

Ally Schmidt - Author
By

Nov. 20 2020, Updated 12:30 p.m. ET

Snapshot

Delta Air Lines (DAL) reported its fourth quarter 2016 results on January 12, 2016. The airline’s revenue fell 0.5% year-over-year or YoY to $9.5 billion while its adjusted earnings per share also fell from $1.25 to $0.84, as adjusted profit after tax also fell 37% year-over-year or YoY to $622 million.

DAL beat analyst consensus estimates on revenues, and earnings were in line with analysts’ estimates. Analysts had estimated revenues of $9.35 billion and earnings per share of $0.85.

For more details on analysts’ expectations, you can read our pre-earnings analysis on Delta, What Can Investors Expect from Delta Air Lines’s 3Q16 Earnings?

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Market remains flat

The airline saw its stock fall about 1.1% during the day of the report to end at $50.9. After market hours, Delta Air Lines stock was down a further 0.18%. Most other airlines stocks also lost value on the same day. JetBlue Airways (JBLU) lost 4.2%, Allegiant Travel (ALGT) lost 1.9%, United Continental (UAL) lost 1.4%. Southwest Airlines also lost 1.3% on the same day, while American Airlines (AAL) lost 1.1% and Alaska Air Group (ALK) lost 0.57%. Spirit Airlines (SAVE) was the only airline to gain 0.43% on the day.

The Consumer Discretionary Select Sector SPDR Fund (XLY) fell slightly by 0.1% on January 12, 2016. We compare airlines to the consumer discretionary sector as the airline industry depends on consumer spending. The broader market tracked by the SPDR S&P 500 ETF (SPY) also fell 0.25%.

Series overview

In this series, we’ll analyze DAL’s performance for 4Q16. We’ll also discuss what factors are expected to drive DAL’s growth in 2017. Finally, we’ll wrap up the series with a discussion of DAL’s valuation multiple.

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