Delta Air Lines is lifting its 2023 guidance as holiday travel picks up and travelers return to the skies
its 2023 guidance after beating analyst’s expectations and travelers return to the skies this holiday season. In a release issued by the Atlanta-based airline on Wednesday, Delta said it is now predicting a 7% to 8% jump in revenue for the quarter ending December, up from previous guidance of 5% to 9%.
The air carrier also expects to generate more than $2 billion of free cash flow to enable further debt reduction. Delta expects to cut leverage by half in two years — from 5x in 2022 to 2-3x in 2024. The company also predicted adjusted earnings between $1.35 and $1.40 a share for the last three months of 2022, notching an upgrade from its earlier predicted range of $1 to $1.25.Meanwhile, adjusted earnings per share of $5 to $6 are expected in 2023 based on higher margins and a 15% to 20% increase in revenue over 2022. Delta CEO Ed Bastian said in the release, demand for air travel remains robust and Delta’s momentum is building. "Our 2023 outlook for revenue growth and margin expansion support a near doubling of EPS to $5 to $6 per share, keeping Delta on track for its 2024 earnings target of over $7 per share," Bastian added. Delta also included a three-year financial outlook showing predicted operating margin increases of 10% to 12% in 2023 and a range of 13% to 15% in 2024. At the opening bell, shares of Delta were up roughly 3.02% after rising nearly 0.55% the last five days and 1.17% the last month.
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