Delta Air Lines, Inc. Beats On Earnings, Revenues In Line

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Delta Air Lines released its latest earnings report before opening bell this morning, posting adjusted earnings of $1.70 per share on $10.48 billion in revenue. Analysts had been expecting $1.65 per share in adjusted earnings and $10.53 billion in revenue.

Delta Air Lines sees revenues decline

In last year’s third quarter, the airline reported $11.11 billion in revenue. Management said $100 million of the $624 million decline was the result of the technology outage, while $70 million was from yen hedge gains from the previous year. Passenger unit revenue fell 6.8%, which includes almost two points of impact from the outage and yen hedges. Capacity grew 1.5%. Mainline passenger revenue declined 3.3% on a 4.4% increase in capacity, while regional passenger revenue fell 5.2% on an increase of 0.5% in capacity.

Atlantic passenger revenue fell 8% on a 1.9% increase in capacity, while Pacific passenger revenue tumbled 14.5% on a 7.7% decline in capacity. Latin America passenger revenue declined 1.9% on the pack of a 3.2% decline in capacity.

Cargo revenue fell 14.8%, while other revenue declined 5.4%.

“Delta’s resiliency stood out this quarter as we worked through the outage, continued revenue headwinds, and volatile fuel prices to produce the industry’s best operational reliability and service for our customers along with solid margins, cash flows and returns for our owners,” said Delta Airlines CEO Ed Bastian said in a statement. “With our focus on building a more sustainable and durable business, we will be taking a cautious approach to 2017 by keeping our capacity in line with the December quarter’s 1 percent growth level.”

Delta Air Lines updates guidance

Delta Air Lines expects margins to decline slightly year over year in the December quarter as unit revenue declines fully offset savings from reduced fuel prices and productivity initiatives. Management projects a 14% to 16% operating margin and a 35 to 5% decline in passenger unit revenue.

The airline returned $650 million to shareholders during the third quarter, including $150 million in dividends and $500 million in share repurchases.

Shares of Delta Air Lines edged higher by as much as 0.03% to $39.28 in premarket trading this morning.

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