Transportation
Delta Air Lines Earnings Overcome Lower Revenues

Published:
Last Updated:
Delta Air Lines Inc. (NYSE: DAL) reported first-quarter 2016 results before markets opened Thursday. The airline posted adjusted quarterly earnings per share (EPS) of $1.32 on revenues of $9.25 billion. In the same period a year ago, Delta reported EPS of $0.45 on revenues of $9.39 billion. First-quarter results also compare to the consensus estimates for EPS of $1.30 on revenues of $9.27 billion.
On a GAAP basis, Delta’s EPS for the quarter totaled $1.21 and includes mark-to-market adjustments totaling $98 million related to fuel hedging. GAAP EPS in the first quarter of last year totaled $0.90.
Adjusted to include mark-to-market impacts, fuel cost averaged $1.36 a gallon, a drop of $0.49 a gallon sequentially and 56.5% year-over-year. The company’s refinery posted a net loss of $28 million in the quarter.
Operating revenues declined by 1.5% year over year. Mainline revenues rose 3.2%, but on a passenger unit basis mainline revenues were down 4.4%. Total passenger revenues dropped 2% and total passenger unit revenues fell 4.6%.
Ed Bastien, Delta’s incoming CEO, said:
We have started 2016 with tremendous momentum, generating over $1.5 billion in adjusted pre-tax income, delivering industry-leading operations including 49 days of perfect mainline completion factor for our customers, and reaching our goal of becoming an investment grade company.
The incoming president, Glen Hauenstein, added:
We are forecasting a unit revenue decline of 2.5 – 4.5 percent for the June quarter. While this is an improvement over our March quarter performance, we are focused on getting unit revenues back to a positive trajectory and we will make adjustments to our fall capacity levels if we are not making sufficient progress over the coming months.
Other second-quarter estimates included an operating margin forecast of 21% to 23%, fuel prices in a range of $1.48 to $1.53 per gallon, costs per available seat mile up about 2%, and system capacity up 2% to 3%. Consensus analysts’ estimates call for EPS of $1.84 on revenues of $10.55 billion. Delta did not provide revenue or EPS estimates.
Shares traded up about 1.9% at $48.98 in Thursday’s premarket. The stock’s 52-week range is $34.61 to $52.77. Prior to this release, Thomson/Reuters had a consensus price target of $63.14 on the company’s shares.
Are you ahead, or behind on retirement? For families with more than $500,000 saved for retirement, finding a financial advisor who puts your interest first can be the difference, and today it’s easier than ever. SmartAsset’s free tool matches you with up to three fiduciary financial advisors who serve your area in minutes. Each advisor has been carefully vetted and must act in your best interests. Start your search now.
If you’ve saved and built a substantial nest egg for you and your family, don’t delay; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.