Delta Air Lines Inc. (NYSE:DAL) stock was down 5.25% in early afternoon trading on April 2. Shares have now declined 2.1% in 2018 so far. Like other U.S. airliners, Delta has been plagued by a myriad of controversies in the era of social media.
Most recently, Delta discontinued its discount program for “politically divisive” groups, including the National Rifle Association (NRA). Republican lawmakers, including Lt. Governor of Georgia Casey Cagle, lashed out at the company for an “attack on conservatives”. Lawmakers also repealed a budget provision that included a $50 million fuel tax exemption for Airlines, which included $40 million that was set aside for Delta.
Delta released its fourth quarter results on January 11. The company raised its 2018 guidance by 20% in response to the report. Trans-Atlantic travel grew 9% in Q4 2017 and passenger revenue experienced growth in every single region. Delta reported net income of $572 million or $0.80 per share which was down 8% year over year. Adjusted net income was at $0.96 per share which beat analyst expectations.
Shares of Delta have increased 19.2% year over year. The company raised its full-year estimates for 2018 to $6.70 per share compared to $6.35 originally. The U.S. Tax Cuts and Jobs Act is also expected to be a boon for earnings going forward. The company also announced a cash dividend of $0.305 per share representing a 2% dividend yield.
Things look positive for Delta in 2018 but creeping economic pressure and fears of a trade war will weigh on investors. The airline industry is particularly vulnerable to economic shocks.
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