Delta Airlines Inc. ( DAL) shares plunged after it released its December quarter outlook on Thursday, Jan. 3, forecasting slightly lower revenue growth.
The stock tumbled 8.9% on Thursday, and other carriers followed suit. United Continental Holdings Inc. ( UAL) dropped 5%, American Airlines Group Inc. ( AAL) dropped 7.5%, Southwest Airlines Co. ( LUV) fell 3.3% and JetBlue Airways Corp. ( JBLU) sank 1,7%.
In its December report, Delta revealed that it expects fourth-quarter adjusted earnings per share of $1.25 to $1.30.
Though Delta called that number "at the high end of initial guidance provided in October," the airline acknowledged that December didn't improve as quickly as planned, and that it missed some potential savings on fuel by buying at the wrong time.
In addition, Delta expects to see a pretax margin of up to 11%, which is above last year's 9.8%.
While noting that demand for business and leisure travel has been healthy and the "close- in yield momentum continues," Delta cautioned that "the pace of improvement in late December was more modest than anticipated."
Costs, however, fell slightly, and year-over-year total revenue growth was forecast at about 7% for the three months ended Dec. 31.
Non-fuel expenses were expected to be a half percent lower than last year at the same time, thanks to fleet changes. Fuel is also expected to be a dime lower per gallon that initial guidance, to $2.38 to $2.43 per gallon.
But the timing of inventory purchases and maintenance at a refinery, "offset a portion of the benefit" from the lower fuel prices.
Delta gave back about $560 million to shareholders through dividends and share repurchases in the quarter, for a total of $2.5 billion in 2018.
The airline said it carried 15.3 million customers during December and hit an annual record of 192 million passengers across its global airline network throughout the entire year.