Shares of Delta Air Lines fell the most in the Standard & Poor's 500 index Wednesday after the airline lowered forecasts for some third-quarter targets, dragging down the shares of other U.S. carriers.
Delta shares slid 5.2 percent to $38.82 at the close, its biggest daily decline since June 12. The Bloomberg U.S. airlines index fell 2.9 percent, with all 11 member companies down, and the S&P 500 was little changed.
In a presentation to analysts at a Cowen & Co. conference, Delta said third-quarter revenue for each seat flown a mile will increase 2 percent to 3 percent, down from a previous forecast of 2 percent to 4 percent. The Atlanta-based carrier also lowered its quarterly operating margin outlook to 15 percent to 16 percent, from a 15 percent to 17 percent range in July.
"They just took the high end down," Michael Derchin, an analyst at CRT Capital Group in Stamford, Conn., said in an interview. "It doesn't mean they won't make the high end.'
Chief Financial Officer Paul Jacobson, speaking to analysts at the conference, cited overcapacity in transatlantic routes, geopolitical events in Russia and the Middle East, and the Ebola outbreak as weighing on unit revenue. Those issues damped unit revenue by about 1 percentage point, Delta said in a statement before the presentation.
The pared-back targets come as the third-biggest carrier raised its projection for fuel prices by 2 cents to $2.90 to $2.95 a gallon.
Delta's shares have risen 41 percent this year, as it has seen strong U.S. demand and packed planes. The carrier reiterated Wednesday that it's still on track to produce more than $4 billion in pretax income for 2014.
The market has punished Delta before when it has issued revenue or earnings forecasts midquarter that were lower than earlier projections, JPMorgan Chase & Co. analyst Jamie Baker said in a research note.