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Thursday's Market Minute: Delta 4Q Earnings Beat

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Delta Air Lines reported a fourth quarter above estimates, with adjusted earnings per share of $0.22 and revenue of $9.47 billion, which is its highest since late 2019. The revenue beat was driven by more business travel and strong holiday bookings, but the company canceled hundreds of flights over the period as COVID caused staffing and scheduling issues for the airlines as a whole. 

The disruption from omicron is expected to continue, with Delta forecasting a first-quarter loss. CEO Ed Bastian says the variant will likely delay travel demand rebound by sixty days, with momentum resuming from President’s Day Weekend onward. The company predicts 1Q capacity will be at 83%-85% of 2019 levels. 

The stock is up before the bell, suggesting investors believe in Delta’s continuing recovery despite omicron threats. However, despite some questions as to whether the trend is plateauing, reported cases are still skyrocketing, and the W.H.O. said half of people in Europe could be infected with the variant in the next six to eight weeks. Omicron is still causing Delta to cancel flights, although the company said it only canceled 1% over the last week. If investors are waiting for demand to rebound, will it be on the timeframe they expect?

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