Delta Air Lines lowers outlook, says economic uncertainty driving softness in domestic demand

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Delta Air Lines slashed its first-quarter earnings and revenue outlook Monday, saying that a recent decline in consumer and corporate confidence amid growing uncertainty over the economy is weakening domestic demand.

The company noted that its premium, international and loyalty revenue growth trends remained consistent with expectations.

Shares in the Atlanta-based carrier fell 13.2% in after-hours trading after closing 5.5% lower during the regular session. The stock is down 16.8% so far this year.

The airline released its updated guidance a day before its executives were scheduled to give a presentation at the J.P. Morgan Industrials Conference.

Delta expects first-quarter revenue will rise between 3% and 4% compared to a year earlier. That's below the company's previous outlook for revenue growth between 7% and 9%.

The airline also predicted its first-quarter earnings per share will range between 30 cents and 50 cents. That's down from its prior guidance, which called for earnings per share between 70 cents and $1.

In January, Delta released fourth-quarter results that topped Wall Street's profit and revenue estimates, as the company benefited from strong demand during the crucial holiday period.

But in the weeks since, the U.S. economy has begun showing signs of weakening, mostly through surveys showing increased pessimism. A widely followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests the U.S. economy may already be shrinking.

Uncertainty over the impact that the Trump administration’s tariffs on imported goods from Canada, Mexico, China and elsewhere will have on consumers and businesses is also weighing on the stock market.

Delta's dimmer outlook comes less than a month since one of the airline's jets burst into flames and flipped upside down as it tried to land in Toronto. Miraculously, all 80 people on board the flight from Minneapolis to Toronto’s Pearson International Airport survived.