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Delta Air Lines cuts Q4 revenue outlook; shares drop

Shares of Delta Air Lines Inc. tumbled after the Atlanta-based carrier lowered its revenue forecasts for the fourth quarter of 2018.

Delta now expects year-on-year total revenue growth of about 7.0%, excluding third-party refinery sales, in the fourth quarter, down from a previous estimate of 7.5%.

Total unit revenue was projected to grow about 3% year over year in the quarter, compared to a prior forecast of a 3.5% gain.

"The overall demand environment remains healthy with strength in both business and leisure segments throughout the quarter," Delta said in an update to investors. "While close-in yield momentum continues, the pace of improvement in late December was more modest than anticipated."

Adjusted fourth-quarter earnings are expected to be in the range of $1.25 per share to $1.30 per share, the high end of Delta's initial guidance in October 2018.

Delta also said the timing of inventory purchases and maintenance at a refinery "offset a portion of the benefit" from lower fuel prices, which the airline projected to be at $2.38 per gallon to $2.43 per gallon on an adjusted basis in the fourth quarter.

Delta shares were down 8.64% as of 12:03 p.m. ET, trading at $45.76 apiece.