While a surge in domestic leisure travel helped Delta Air Lines (NYSE:DAL) turn a profit in the second quarter, investors continue to be worried about its growth prospects due to the rapid spread of the COVID-19 Delta variant. As a result, the stock’s price has declined by more than 10% over the past three months. So, let’s discuss if it is wise to buy DAL shares on the dip.Delta Air Lines, Inc. (DAL) reported $652 million in net income in its fiscal second quarter (ended June 30, 2021). It is the first quarter for which DAL has reported a profit since the onset of the COVID-19 pandemic. U.S. government aid and a surge in domestic travel in the summer have helped the airline generate a profit in its last reported quarter. The Atlanta, Ga.,-based company is also seeking to cut its pandemic debt burden with a bond call.
However, the stock has retreated 10.6% over the past three months and 6.2% over the past month to close yesterday’s trading session at $41.67.
DAL’s business travel and international travel segments, which are more profitable, higher-margin businesses, continue to be impacted by the spread of the coronavirus Delta variant. Furthermore, many investors are worried about the possibility of business travel failing to return to pre-pandemic levels with advancing technology facilitating improved remote work arrangements. There has also been a tempering in hedge fund sentiment toward the stock lately. So, its near-term prospects look uncertain.