Delta lowers margin guidance, sending airline shares down
WASHINGTON (AP) — Shares in Delta and other airlines fell Monday after the company lowered its guidance for its operating margin in the current quarter as it continues to face cost headwinds.
Delta Air Lines Inc. CFO Paul Jacobson told an investor conference that the company is expecting a 10 to 11 percent operating margin, down from previous guidance of 11 to 13 percent, for the quarter ending this month. Jacobson said he thought those margin pressures would peak in the current.
He noted a $20-per-barrel increase in fuel prices in the first quarter over the same period last year. As fuel prices stabilize and revenue improves, the airline expects to be able to expand its operating margin to its targeted 17 to 19 percent range in the second half of the year, he said.
Shares in Delta fell 3 percent in afternoon trading. United Continental Holdings Inc., American Airlines Group Inc. and JetBlue Airways Corp., and Southwest Airlines were also trading lower.
President Donald Trump also signed a reworked version of his controversial travel ban on Monday, though it’s unclear whether that contributed to investors’ pessimism in the sector.