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Delta Air Lines shares fly lower ahead of third quarter results

Shares have struggled to take off this year, due to various headwinds, analysis shows
Delta Air Lines shares fly lower ahead of third quarter results
In the third quarter, analysts expect the US carrier by traffic to report net income of US$1.13bn compared to US$1.26bn a year earlier.

Shares in Delta Air Lines Inc (NYSE:DAL) flew lower today ahead of its third quarter results on Wednesday before the bell, as analysts predicted a fall in profits.

Shares have struggled to take off this year, due to various headwinds, and according to Zacks, has underperformed the Zacks Transportation-Airline industry on a year-to-date basis.

Shares have gained 5.7%, whereas the industry has rallied 15.2%.

In the third quarter, analysts expect the US carrier by traffic to report net income of US$1.13bn compared to US$1.26bn a year earlier.

But revenue is expected to grow - to US$11.04bn, up from $10.48bn a year ago.

Last week, the carrier lowered its operating margin expectations, blaming a percentage point of the 2-3% decline on a $120 million hit from 2,200 flight cancellations due to Hurricane Irma.

Following that news, broker Stifel lowered its target on the shares to US$75 from US$80 previously, while maintaining a 'buy' rating.

Scrutinised this week will be fuel costs, which are expected to limit earnings growth in the three months.

The price per gallon is expected to be between $1.68 and $1.73.

Delta shares today lost 0.63% in New York to stand at US$51.68 each.

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