Why Delta Stock Dropped: Q3 Earnings Miss and $500M IT Outage Impact Explained
Delta Air Lines shares fell after disappointing Q3 earnings and a cautious Q4 revenue outlook, compounded by a costly $500 million IT outage that led to 7,000 flight cancellations.
Highlights to Know
- Delta Air Lines shares dipped in early trading following weaker-than-expected Q3 earnings and a conservative Q4 revenue forecast.
- The airline confirmed a substantial $500 million expense tied to a July global IT failure caused by CrowdStrike, which forced cancellation of 7,000 flights over five days.
- Delta reported adjusted Q3 earnings per share of $1.50 on $15.68 billion revenue, falling short of analyst consensus, and projects modest 2%-4% revenue growth in Q4.
Delta Air Lines (DAL) experienced a decline in premarket share prices after releasing third-quarter financial results and a fourth-quarter sales outlook that did not meet analyst expectations.
The $500 million cost, estimated by CEO Ed Bastian, stems from the July global IT outage triggered by CrowdStrike, which disrupted operations and led to thousands of flight cancellations.
In Q3, Delta posted adjusted earnings per share of $1.50 with revenues totaling $15.68 billion, below Visible Alpha analyst estimates. The company anticipates a fourth-quarter revenue increase between 2% and 4%, which is more conservative than prior forecasts.
IT Outage’s Financial Fallout: $500 Million Loss and 7,000 Cancelled Flights
Delta detailed the financial impact of the IT failure, citing $380 million in lost direct revenue due to refunds and compensation, alongside $170 million in additional costs. However, the airline saved approximately $50 million in fuel expenses by canceling 7,000 flights over five days.
Despite a strong year with shares up over 25% before this announcement, Delta’s stock dropped 3% shortly before the market opened.
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