Wall Street Breakfast Podcast: Delta’s Q3 Earnings in Focus

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Delta Air Lines (DAL) Q3 preview: Low fuel prices may offset July disruption. (00:23) BlackRock (BLK) says it is exploring a acquisition of the private credit company HPS. (01:41) OpenAI (MSFT) projections suggest without profit to 2029: report. (02:26)

This is an abridged transcript of the podcast.

Delta Air Lines ( NYSE:DAL ) is expected to report its third-quarter earnings during market hours today, and investors will be looking to gauge the CrowdStrike outage that crippled the airline’s operations in July.

The consensus EPS estimate is $1.55 (-23.6% Y/Y) and the consensus revenue estimate is $15.09 billion (-2.6% Y/Y).

However, airlines are expected to benefit from this boost, with short-term bookings and lower jet fuel prices providing some margin squeeze.

The firm adjusted its outlook after flight disruptions from the CrowdStrike ( CRWD ) outage that occurred early in the third quarter.

The disruption is expected to cost Delta Air Lines ( DAL ) $0.45 per share for third-quarter earnings and increase the airline’s cost per available seat mile for the quarter.

The company’s stock is up 26% YTD.

Over the past 2 years, DAL has beaten EPS estimates 63% of the time and topped revenue estimates 88% of the time.

Over the past 3 months, EPS estimates have seen 0 upward revisions and 15 downward revisions. Revenue estimates saw 1 upward revision and 5 downward revisions.

BlackRock (NYSE:BLK) is among the firms considering acquiring HPS Investment Partners.

This is a deal that would give the world’s largest asset manager a significant foothold in the private credit market.

Bloomberg News reported, citing people familiar with the matter, that HPS and BlackRock have held talks as HPS pursues a possible initial public offering.

Bloomberg previously reported that an IPO could value HPS at $10 billion or more, and an outright acquisition of the company would likely have a higher valuation.

A deal is not imminent and talks could end without a deal, some of the people told Bloomberg.

Another potential buyer is private equity firm CVC Capital Partners, the report said.

Microsoft-backed OpenAI ( NASDAQ:MSFT ) is not expected to turn an annual profit until 2029, according to company financial documents obtained by The Information.

The documents show that annual losses could reach up to $14 billion in 2026, the report said.

Projections showed the company to reach $100 billion in annual revenue in 2029. OpenAI also expects to spend about $200 billion by the end of the decade, minus stock compensation. Losses between 2023 and 2028 are estimated to reach $44 billion.

The report also found that Microsoft is entitled to 20% of OpenAI’s revenue.

Last week, OpenAI closed its latest round of funding totaling $6.6 billion, propelling the company to a $157 billion valuation. Microsoft and Nvidia ( NVDA ) both participated in the round.

More articles on Seeking Alpha:

Texas Instruments, Infineon added as new suppliers Nvidia: analyst

Costco reports a 9% increase in net sales and offset sales from September

Peter Todd denies claims he is the mysterious creator of bitcoin – reports

catalyst clock:

• Hewlett Packard Enterprise (HPE) will organize the AI ​​Day event. Management said the discussions will focus on the company’s cutting-edge technology and capabilities that are driving the company’s growth in AI.

• Guidewire Software (GWRE) will hold its 2024 Analyst Day event.

• Advanced Micro Devices (AMD) will hold the Advancing AI 2024 event to showcase the new generation of AMD Instinct accelerators and 5th generation AMD EPYC server processors. The company said it will also discuss PC networking and AI updates, in addition to highlighting its ecosystem of AI solutions.

• Tesla ( TSLA ) will hold its highly anticipated robotaxi event at 10:00 PM ET (7:00 PM PT). The update could affect other companies with big plans for robotaxi or self-driving vehicles, such as Waymo ( GOOG ), Uber Technologies ( UBER ), Aurora Innovation ( AUR ), Amazon ( AMZN ) Zoox, Baidu ( BIDU ) Apollo, and GM ( GM ) Cruise. .

In today’s economic calendar:

8:30 am, the September Consumer Price Index report will be released. CPI is expected to rise 0.1% M/M, according to economists’ consensus, down from August’s 0.2% pace. This would slow Y/Y growth to 2.3% from 2.5% in the previous month.