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Delta Air, Other Carriers Provide Weak  Guidance as Covid Surges

Delta expects revenue at the lower end of prior guidance, as the recent rise in Covid cases is suppressing demand.

Delta Airlines  (DAL) - Get Delta Air Lines, Inc. Report and a number of other major airlines on Thursday offered downbeat earnings guidance as the spread of the COVID delta variant suppresses travel demand.

But judging by the carriers' rising stock prices on Thursday, the reports didn't daunt investors.

Atlanta-based Delta says in a Securities and Exchange Commission filing that for the third quarter, “adjusted total revenue, excluding third-party refinery sales, is expected to be at the lower end of the prior guidance range, as the recent rise in Covid cases is suppressing demand in the second half of the quarter.”

It expects adjusted revenue of $12.51 billion for the quarter. The prior guidance called for a decline of 30% to 35%.

“During the quarter, demand exceeded expectations in July,” Delta said. “In early August, the pace of recovery paused due to the sharp rise in Covid cases.”

Further, “initial revenue expectations were predicated on an acceleration of business travel through the September quarter,” the company said. But “the pace of business travel recovery has paused, as companies delay or scale down initial office reopenings.”

Still, “while the environment remains choppy, booking trends have stabilized in the last 10 days, and the recovery is expected to resume as case counts decline,” Delta said.

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Delta recently traded at $41.46, up 4.6%. 

Among other airlines, American Airlines  (AAL) - Get American Airlines Group, Inc. Report projected third-quarter revenue would slide 24% to 28% from the comparable 2019 quarter. It previously predicted a 20% decline.

The Fort Worth, Texas, carrier's shares recently traded at $20.35, up 6.4%

United Airlines  (UAL) - Get United Airlines Holdings, Inc. Report forecast pretax losses for the third and fourth quarters. It previously projected pretax profit.

The Chicago airline recently traded at $47.24, up 3.8%.

And Southwest Airlines  (LUV) - Get Southwest Airlines Co. Report is suffering declines in bookings and rising cancellation rates. 

Southwest recently traded at $49.83, up 3.5%