Delta Airlines and Fastenal open earnings season on Wall Street 🗽

Reports from Delta Airlines (DAL.US), an airline company, and Fastenal (FAST.US), which operates in the logistics, manufacturing and supply chain industry, opened the earnings season on Wall Street. Fastenal loses 3% in premarket despite strong report, Delta is trading 2,5% higher despite weak report due to higher 'summer' outlook.

Delta Airlines (DAL.US)

The airline's shares are gaining on the back of Q2 revenue and profit forecasts that beat projections. Sentiment was also supported by management's statements, which underscored strong demand for commuter travel despite concerns about weakness in other sectors. In Q1, the company reported lower revenues and profits than forecasts and posted a nearly 5% increase in costs due to storms that grounded flights in Q1, among other factors. The company said that it's domestic sales in Q1 were 85% of Q1 2019 result.

Revenues: $11.84 billion vs. $11.99 billion forecast

Adjusted earnings per share: $0.25 vs $0.3 forecast 

• The airline industry typically sees more activity during the tourist spring and summer periods, making investors ultimately positive about the company's report. The airline intends to increase its operational capacity and reported record bookings for the summer. In Q1 2023, the company reported a loss largely due to 34% higher 4-year pilot contracts;
• The company estimates Q2 pre-sales will grow 15% to 17% y/y with adjusted operating margins of up to 16% and adjusted earnings per share of $2 to $2.25. Refinitiv analysts' forecasts pointed to 14.7% y/y revenue growth and nearly 20% lower earnings per share than the company's forecasts;
• Also providing a positive boost to the company is high demand for premium services and a partnership with US payments giant American Expreess, which, according to the company, provided it with additional booking demand and nearly $1.8 billion in revenue in Q1.

Delta Airlines (AIR.US) shares, D1 interval. Pre-opening quotes point to the area around $35, where, after overcoming the SMA200, bulls will have to confirm momentum by breaking out above the SMA100. The key will likely be the supply reaction to the upward gap. Source: xStation5

Fastenal (FAST.US)

In addition to supply chain and inventory management services, the company also sells metal components such as bolts, nuts, rods and fasteners used in the construction industry, so its performance may provide some measure of the health of the global economy. Despite a relatively positive Q1 2023 report, the stock is losing nearly 3% before the open.

Revenues: $1.86 billion vs. $1.861 billion forecast ($1.704 billion in Q1 2022, up more than 10% y/y)

Earnings per share (EPS): $0.51 vs. $0.49 forecasts 

• A better report supported by higher demand from the manufacturing sector was not enough to improve sentiment. Revenue marginally missed expectations. Investors remain cautious and expect that the company's earnings could be affected by a slowdown in future quarters because interest rate hikes tend to have a delayed effect on the economy. Slowing construction activity, deteriorating financing conditions and weaker consumers in a high rate environment could weigh significantly on the company's future performance.

Fastenal (FAST.US) shares, D1 interval. The stock price has still not climbed above pre-pandemic levels, but started in 2020 long-term upward trend line has remained in place. In addition, the price has broken the short-term downtrend. The key level seems to be the level near $50, where the SMA100 and SMA200 averages currently run. Source: xStation5