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Delta, AT&T earnings: What to know in markets Wednesday

Heidi Chung

Earnings from Delta Air Lines (DAL) and AT&T (T) will take center stage Wednesday.

The airline industry has been one of the hardest hit amid the COVID-19 pandemic. Travel demand got hammered over recent months and major U.S. airlines have had to slash capacity in an attempt to preserve cash. Investors will be focusing on commentary from Delta’s management Wednesday morning for any updates on how the company is dealing with the ongoing pandemic.

Delta is expected to report an adjusted loss per share of 87 cents on $9.19 billion in revenue during Q1. On April 4, Delta said that it was burning through $60 million of cash per day and expected second-quarter revenue to fall 90%. Much like the rest of the companies reporting this earnings season, Delta’s big picture and guidance will matter more much than the company’s financial results during the previous quarter.

UBS pointed out that “For 2020, after factoring in the 70% grant as part of the CARES act, DAL will have about $21 billion in total debt and $4.2 billion in cash and short-term investments.”

Katja Herbers arives for the Premiere Of HBO's "Westworld" Season 3 held at TCL Chinese Theatre on March 5, 2020 in Hollywood, California. (Photo by Albert L. Ortega/Getty Images)

Meanwhile, telecom giant AT&T will also deliver first-quarter financial results ahead of the market open. It is expected to report adjusted earnings of 84 cents per share on $43.99 billion in revenue during Q1.

One major point of focus for investors will be on AT&T’s upcoming launch of HBO Max on May 27. If HBO Max launches as scheduled, it would be yet another streaming service looking to cash in during the COVID-19 pandemic.

Tuesday evening, streaming giant Netflix (NFLX) reported that it added 15.8 paid subscribers in the first quarter, exceeding expectations for 8.47 sub additions. Shares hit a record high in after-hours trading. Meanwhile, media powerhouse Disney (DIS) announced earlier this month that its streaming service Disney+ hit 50 million global subscribers shortly after launching in key European markets and India.

With the streaming space getting even more saturated, it will prove crucial for AT&T to deliver a solid plan of action with its prepared launch of HBO Max.

Furthermore, any updates from management on AT&T’s previous proposed three-year business plan will be closely watched. AT&T proposed the plan after pressure from activist investor Elliott Management pushed for a board shakeup last fall.

With cord-cutting still on the rise and COVID-19-related cost cutting, investors will also be paying attention to how DirecTV has been faring amid the current environment.

Other notable reports schedule for Wednesday include Kimberly-Clark (KMB), Biogen (BIIB) before market open; O’Reilly Automotive (ORLY), CSX (CSX), Las Vegas Sands (LVS) after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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