Why did DAL's Q2 and Q3 2024 earnings disappoint?

Delta Air Lines' (DAL) Q2 and Q3 2024 earnings fell short of expectations due to a combination of factors: 1. **Fuel Costs**: Rising fuel prices have been a significant challenge for Delta Air Lines. In Q2 2024, the company's EPS was negatively impacted by fuel costs that were higher than anticipated. This trend was primarily due to production cuts by major oil-producing nations and geopolitical tensions. For Q3 2024, fuel prices were expected to be between $2.70 and $2.90 per gallon, which could further strain the company's profitability. 2. **Labor Costs**: Elevated labor costs have also affected Delta Air Lines' financial performance. The company has been grappling with increased fuel and labor costs, which have squeezed its margins. In Q3 2024, the company's EPS guidance was lowered to $1.70-$2.00, compared to the consensus estimate of $2.04, indicating the impact of higher labor costs. 3. **Discounting Pressure**: In Q2 2024, Delta Air Lines faced discounting pressure at the low end of the market, which hurt its pricing power and contributed to the disappointing performance. This was due to excess industry capacity, which dampened airfares and affected the company's revenue and profitability. In summary, Delta Air Lines' Q2 and Q3 2024 earnings were weighed down by higher-than-expected fuel and labor costs, along with discounting pressure, leading to a decline in profitability and missing earnings expectations. |code|Ticker|Name|Date|Total Revenue|Diluted EPS|market_code| |---|---|---|---|---|---|---| |DAL|DAL.N|Delta Air Lines|2024 Q1|1.3748E10|0.06|169| |DAL|DAL.N|Delta Air Lines|2024 Q2|1.6658E10|2.01|169| |DAL|DAL.N|Delta Air Lines|2024 Q3|1.5677E10|1.97|169| |code|Ticker|Name|Date|Revenue Surprise|EPS Surprise|market_code| |---|---|---|---|---|---|---| |DAL|DAL.N|Delta Air Lines|2024 Q3|-5.0E7|-0.02|169|