Delta Disappoints on March Unit Revenue (Update 1)
ATLANTA (TheStreet) -- Delta
In mid-morning trading, airline shares were falling, led by Delta's decline of about 7%, as shares were down $1.07 to $15.18. Shares in US Airways
Analysts had been expecting a March passenger revenue per available seat mile gain for Delta of 4% to 5.5%; Delta's guidance was at the low end of that range. At last month's JP Morgan transportation conference, Delta President Ed Bastian forecast a first -uarter PRASM gain of 4.5% to 5.5%, which implied a March gain of 4%. Delta has since reduced its quarterly guidance to between 4% and 4.5%.
On Tuesday before the market opened, Delta said its March PRASM gain was diminished by the impact of a weakening yen as well as "lower close-in bookings driven by the sequester, lower than expected demand as a result of our attempt to drive higher yields, and temporary inefficiencies during implementation of new revenue management technology."
The negative trends offset PRASM gains in the trans-Atlantic and Latin markets, Delta said.
Delta is the first major carrier to report March traffic. Before Tuesday's decline, its shares had risen 34% year to date.
In a note, Cowan Securities analyst Helane Becker recommended: "Buy the dip as fundamentals remain strong." She has a target price of $19.
-- Written by Ted Reed in Charlotte, N.C.
>To contact the writer of this article, click here: Ted Reed