Written by StockNews.com

Delta Air Lines, Inc. (NYSE: DAL) shares were down as much as 4% on Monday morning [Mar 6, 2017 | 11:05am], after the airline operator cut its forecast for a key revenue metric, citing a lower-than-anticipated fare rebound.

Specifically, Delta lowered its PRASM outlook for the current period. From Bloomberg:

Passenger revenue for each seat flown a mile — a closely watched measure of pricing power — will be flat this quarter, the Atlanta-based carrier said in a presentation Monday. That marked a reduction from Delta’s outlook in January, when it said the benchmark gauge known as unit revenue could rise as much as 2 percent after two years of declines.

The Atlanta-based company also cut its operating margin outlook to a range of 10% to 11%. Previously, it had seen margins of 11% to 13% for the first quarter.

Back in January, Delta had painted a much more optimistic view of 2017 amid its latest earnings report. Along with other airline operations, DAL is seeking to charge higher rates by cutting back on the number of flights it offers.

Apparently, that tactic isn’t working out as well as the company had hoped.

Still, Paul Jacobson said at a Raymond James conference today that “The good news is we do expect this to be the trough for the full year in terms of year-over-year margin performance.” Jacobson also noted that higher fuel costs are also eating into Delta’s margins.

Delta Air Lines, Inc. shares were trading at $48.39 per share on Monday morning, down $1.74 (-3.47%). Year-to-date, DAL has declined -1.23%, versus a 6.06% rise in the benchmark S&P 500 index during the same period.

DAL currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 18 stocks in the Airlines category.