Delta Air Lines, Inc. (DAL) Beats EPS Expectations, Shares Jump

Delta Air Lines, Inc. (DAL) Beats EPS Expectations, Shares Jump
By Brian from Toronto, Canada (Delta 767Uploaded by Altair78) [CC BY-SA 2.0], via Wikimedia Commons

Delta Air Lines, Inc. (NYSE:DAL) released its second quarter results this morning before opening bell, posting net profits of $844 million or 98 cents per diluted share, excluding items. Net profits rose $258 million year over year. Analysts were expecting the company to report earnings of 94 cents per share on revenue of $9.7 billion for the quarter. Analyst estimates usually exclude items. Including items, Delta Air Lines, Inc. (NYSE:DAL)’s net income was 80 cents per diluted share.

Delta Air Lines, Inc. (DAL) Beats EPS Expectations, Shares Jump

Shares rose as much as 3% in pre-market trading and 4% after the markets opened. The airline said its June quarter results included a $118 million profit sharing expense in connection with the airline’s recognition of its employees’ contributions.

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Delta Air Lines, Inc. (NYSE:DAL) generated $1.3 billion in operating cash flow and $730 million in free cash flow during the quarter. At the end of the three months, its adjusted net debt was $10.2 billion.

Delta Airlines reports mixed revenue results

Operating revenue fell $25 million year over year, although traffic rose .5% on a .8% capacity increase. Passenger revenue rose .7% year over year, while passenger unit revenue was flat with a .2 percent yield increase. Cargo revenue fell 11.4% as freight yields fell. Other revenue also fell 5.6% after Delta Air Lines, Inc. (NYSE:DAL) decided to discontinue some of its third party maintenance contracts.

Delta Air Lines announces capital deployment plan

During the quarter Delta Air Lines, Inc. (NYSE:DAL) announced its five-year financial plan along with a capital deployment program designed to add $5 billion in value for shareholders. The airline plans to invest between $2 billion and $2.5 billion each year in its fleet, facilities, products and technology. The rest of its free cash flow will be returned to shareholders and be used to further reduce its debt.

Delta announces other achievements

During the second quarter of the year, Delta Air Lines, Inc. (NYSE:DAL) acquired 49% of Virgin Atlantic and began building a joint venture with the company by filing an application for antitrust immunity. It also improved operational performance, bringing its on-time arrival rate to 82.9% and resulting in the least number of customer complaints in May in the company’s history.

In addition, Delta Air Lines, Inc. (NYSE:DAL) invested $1.4 billion at JFK International Airport to open the new Terminal 4 and committed $229 million to update Terminal 5 at Los Angeles International Airport. It also opened the Sky Deck in Atlanta.

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