NYT: Signs of Economic Instability
Delta Air Lines, a major U.S. airline, has nearly halved its first-quarter earnings forecast amid concerns of an economic recession.
On the 10th (local time), according to the New York Times (NYT) and Bloomberg News, Delta Air Lines announced that it expects first-quarter earnings this year to increase by 3-4% compared to the same period last year. This is nearly half of the forecast (7-9%) issued two months ago. The first-quarter earnings per share were also revised down from the previously projected $1 to approximately $0.3-$0.5.
The NYT noted, "Delta Air Lines' downward revision of its earnings forecast is the latest sign that perceptions of the U.S. economy are weakening due to policy changes announced by U.S. President Donald Trump."
Delta Air Lines' stock price fell more than 5% in New York trading on the same day, dropping over 28% from its January peak. In after-hours trading, it declined an additional 15% or more.
Bloomberg News cited a recent report from Deutsche Bank, pointing out that domestic travel demand is being affected by reduced business trips due to widespread government department layoffs, and that spending in non-essential areas may decrease.
Delta Air Lines explained, "With increasing macroeconomic uncertainty recently, consumer and business confidence has declined, impacting our (revenue) outlook," adding that U.S. domestic travel has been the most affected.
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