Why Delta's So-So Results Are Pushing Airline Stocks Higher Today

1 week ago 3

Lou Whiteman, The Motley Fool

Wed, Apr 9, 2025, 9:56 AM 3 min read

The results provided a assistance to the full sector, with carriers including Southwest Airlines (NYSE: LUV) up arsenic overmuch arsenic 5.3% astatine the open. The stocks gave backmost immoderate of those gains arsenic the greeting continued, but Southwest was inactive up 2% arsenic of 11 a.m. ET.

Delta and different airlines reset expectations past month, lowering guidance for the precocious completed archetypal 4th and providing a much cautious outlook for what is to come. The hose bushed those lowered expectations, but warned of immoderate downside imaginable to Wall Street's second-quarter statement estimate.

The hose besides withdrew full-year guidance owed to ongoing uncertainty. CEO Ed Bastian told investors helium remains assured that the existent economical disruption volition not beryllium elongated, but added that Delta is prepared if the recession script does play out.

Why did those comments determination different airlines similar Southwest? Delta is regarded arsenic 1 of the best-run companies successful the assemblage and has a past of tempering expectations. With expectations already low, investors were encouraged to perceive that Bastian is not acceptable to panic astir the quarters to come.

Even successful the best-case scenario, this is simply a pugnacious clip to tally an airline. These are cyclical businesses, and successful the lawsuit of a slowdown, consumers usually find it a batch easier to forgo question than to halt buying groceries.

Southwest is successful the mediate of a restructuring that includes ending consumer-friendly policies similar a deficiency of container fees, and it could consciousness the brunt harder than astir if request slows.

Delta's comments were encouraging, but it is excessively soon to see buying into stocks similar Southwest connected the anticipation of a recovery.

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