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Why Did Delta Air Lines, Inc. (DAL) Soared and The Boeing Company (BA) Fell?

Delta Air Lines, Inc. (NYSE:DAL) and The Boeing Company (NYSE:BA), both came out with their second quarter results on July 23. Delta Air Lines, Inc. (NYSE:DAL) reported a profit of $801 million, or $0.94 per share, up from $685 million or $0.80 per share a year ago. The Boeing Company (NYSE:BA)’s Core earnings per share, excluding for special items rose 45% on the year to $2.42. Both companies beat analysts’ expectations by a wide margin and raised their earnings guidance for the year, but whereas the stock of Delta Air Lines, Inc. (NYSE:DAL) soared after the results were declared, The Boeing Company (NYSE:BA)’s stock dropped.

Boeing BA Airplane 737

CNBC’s Phil Lebeau, on the ‘Nightly Business Report’ attributed the decline of The Boeing Company (NYSE:BA)’s stock to investors being unhappy with The Boeing Company (NYSE:BA) not raising its guidance for cashflow and some doubts regarding the company’s backlog.

“Every sign I see is that this technology change out is going to let, just look at our airplanes 777x, is going to keep going over the next decade or so, that I can see right now,” James McNerney, the Chairman and CEO of The Boeing Company (NYSE:BA) said.

Meanwhile, Delta Air Lines, Inc. (NYSE:DAL) has seen good growth in its earnings, backed by huge demand in Europe and U.S., low fuel costs and packed planes. One of the investments that has really paid-off for Delta Air Lines, Inc. (NYSE:DAL) is its acquisition of a refinery to lower jet fuel cost. The Airline also boasts of impressive load factor, the load factor on average  Delta Air Lines, Inc. (NYSE:DAL)’s flight is around 87%.

“This quarter we are at $2.93 a gallon, every penny is ten million bucks in the quarter. The industry average, excluding Delta is $3.08 and we have been doing that quarter in and quarter out,” Richard Anderson, the CEO of Delta Air Lines, Inc. (NYSE:DAL) said.

Disclosure: None

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