Delta Air Lines Faces $500M Financial Hit As IT Outage Causes Thousands Of Cancellations
Portfolio Pulse from Shivani Kumaresan
Delta Air Lines (NYSE:DAL) faces a $500M financial hit due to an IT outage causing thousands of cancellations. Citigroup (NYSE:C) reduced Delta's Q3 earnings estimates, and Melius Research estimated a $350M impact on operating profit. The outage, caused by CrowdStrike (NASDAQ:CRWD), also damaged Delta's reputation.
July 24, 2024 | 4:02 pm
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NEUTRAL IMPACT
Citigroup reduced its estimates for Delta's Q3 adjusted earnings by 60 cents per share to $1.37 due to increased operational expenses and potential customer compensation costs.
While Citigroup's reduction in Delta's earnings estimates reflects the financial impact of the outage, it is not expected to significantly affect Citigroup's stock price.
CONFIDENCE 90
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
CrowdStrike was identified as the cause of the IT outage that disrupted Delta's operations, affecting multiple industries globally.
Being identified as the cause of a major IT outage that disrupted Delta's operations and other industries could negatively impact CrowdStrike's reputation and stock price in the short term.
CONFIDENCE 80
IMPORTANCE 40
RELEVANCE 30
NEGATIVE IMPACT
Delta Air Lines faces a $500M financial hit due to an IT outage causing thousands of cancellations. Citigroup reduced Delta's Q3 earnings estimates, and Melius Research estimated a $350M impact on operating profit.
The IT outage has caused significant financial and operational disruptions for Delta, leading to reduced earnings estimates and potential fines. This will likely negatively impact Delta's stock price in the short term.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100