Delta Air shares retreat the most in a week on Thursday, company reports a 37% slump in Q4 net income

A report by Delta Air Lines Inc, released on January 12th, revealed a 37% slump in the companys fourth-quarter net income to $622 million compared to the same quarter a year ago. Additionally, the carriers passenger unit revenue shrank 2.7% during the same period, due to a higher number of seats available for purchase on the companys routes.

Delta Air shares recorded their largest daily drop since January 5th on Thursday, following three consecutive sessions of gains. The stock went down 1.07% ($0.55) to $50.89, after climbing as high as $52.00, or a level not seen since December 9th ($52.76). In the week ended on January 8th the shares of the transportation company added 1.00% to their market value compared to a week ago, which marked the first gain in the past four weeks. However, the stock has trimmed its advance to 3.46% so far during the current month, following a 2.10% surge in December. The latter has been a fourth straight monthly gain, but yet, the smallest one since March 2016. For the entire 2016, Delta Air shares retreated 2.96%.

The carrier projected that its passenger unit revenue, which compares sales to flight capacity, would grow between 0% and 2% during the first three months of 2017.

On the other hand, Delta forecast a decline in its operating margin to 11%-13% during Q1 2017. In comparison, the companys operating margin was reported at 18.5% during the first three months of 2016.

Yesterdays report also showed a drop in Deltas operating revenue to $9.46 billion in the last quarter of 2016 from $9.50 billion in Q4 a year earlier. The median estimate by experts had pointed to a larger decrease in operating revenue – to $9.40 billion.

Excluding special items, Deltas fourth-quarter earnings per share (EPS) were reported at 82 cents, which matched the median forecast by analysts, according to Thomson Reuters I/B/E/S. The carriers EPS were $1.18 in Q4 2015.

“We will remain conservative and keep our capacity growth in check until we see a further firming of these revenue trends in the near-term and longer-term, a return to our 17-19 percent operating margin target”, Ed Bastian, Deltas Chief Executive Officer, said in a statement, cited by Reuters.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Delta Air stock are presented as follows:

R1 – $51.10
R2 – $51.32
R3 (Range Resistance – Sell) – $51.53
R4 (Long Breakout) – $52.17
R5 (Breakout Target 1) – $52.92
R6 (Breakout Target 2) – $53.28

S1 – $50.68
S2 – $50.46
S3 (Range Support – Buy) – $50.25
S4 (Short Breakout) – $49.61
S5 (Breakout Target 1) – $48.86
S6 (Breakout Target 2) – $48.50

By using the traditional method of calculation, the weekly levels of importance for Delta Air Lines Inc (DAL) are presented as follows:

Central Pivot Point – $49.93
R1 – $50.68
R2 – $51.69
R3 – $52.44
R4 – $53.20

S1 – $48.92
S2 – $48.17
S3 – $47.16
S4 – $46.16