Delta Jolted By Significant Guidance Dip

Delta Air Lines, Inc. DAL catalyzed an industrywide nosedive Wednesday after cutting its second-quarter guidance between 8 percent and 13 percent.

What Happened 

In the airline’s 8K, it noted a “solid demand environment producing revenue-driven earnings growth, but [a] sharp rise in fuel price pressuring near-term results.”

Delta saw a 3.5-percent plunge in share value after confessing a 50-percent year-over-year pop in fuel prices, revenue for which is not usually recaptured for six to 12 months.

Why It’s Important

The acknowledged pressures are not airline-exclusive but are rather likely to be felt by peers.

American Airlines Group Inc AAL fell 2.5 percent, Southwest Airlines Co LUV 1.6 percent, JetBlue Airways Corporation JBLU 1.3 percent and Spirit Airlines Incorporated SAVE 1.1 percent on the news.

What’s Next

Delta expects to report earnings per share between $1.65 and $1.75 this quarter, well below previous estimates of $1.80 to $2.

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