Delta Air Lines reduces its profit forecast for the year due to supply chain challenges and economic uncertainties, causing its shares to drop by 6.2%. Despite strong holiday demand, the company now expects an adjusted per-share profit of $6 to $7 for 2024, down from its previous target of over $7. The airline is facing supply chain problems impacting aircraft deliveries and increased maintenance costs, with CEO Ed Bastian citing ongoing uncertainty in the supply chain, maintenance arena, and economic outlook. However, the company continues to see strong demand in all markets and has announced a deal with Airbus to purchase 20 A350-1000 widebody aircraft.
Major American companies, including tech giants like Amazon, Meta Platforms, IBM, Spotify, Alphabet, Microsoft, and Intel, as well as Wall Street banks like Goldman Sachs, have announced significant job cuts in recent months. Economic uncertainties, driven by rising interest rates, have forced these companies to slash thousands of jobs in an effort to reduce costs. The job cuts span various sectors, including technology, media, telecom, finance, consumer and retail, energy and resources, health and pharmaceuticals, and manufacturing.
Tesla, along with General Motors and Ford, is cautious about expanding electric vehicle (EV) production capacity due to economic uncertainties and concerns about a slowdown in demand. Tesla CEO Elon Musk expressed worries about higher borrowing costs affecting customers' ability to afford their vehicles, leading to hesitation in purchasing new cars. Other automakers and EV startups have also signaled concerns about demand, with GM delaying production of electric pickup trucks and Ford cutting shifts at its EV plant. EV startups Lucid and Rivian have also experienced setbacks. Analysts believe the dip in demand is more related to pricing and affordability rather than a rejection of EVs, and expect improvement as EV prices decrease.
