Delta Air's stock sinks after profit outlook cut, as fuel price forecast rises

Shares of Delta Air Lines Inc. sank 3% in morning trade Wednesday, after the air carrier cut its second-quarter profit and margin outlooks, as an increase in fuel prices offset a raised unit revenue growth forecast. Delta said at the Deutsche Bank Global Industrials & Materials Summit that it now expects second-quarter earnings per share of $1.65 to $1.75 and pre-tax margin of 13% to $14, which compares with guidance provided in April for EPS of $1.80 to $2.00 and pre-tax margin of 14% to 16%. Meanwhile, Delta's per-gallon fuel price forecast increased to $2.20 to $2.25 from $2.07 to $2.12, while it growth outlook for total unit revenue was revised up to 4% to 5% from 3% to 5%. The stock has shed 1.5% over the past three months, while the NYSE Arca Airline Index has shed 11% and the S&P 500 has gained 1%.