Delta Posts Q1 Loss; Sees Earnings, Revenue Growth, Flat Capcity In Q2; Stock Climbs

(RTTNews) - Delta Air Lines reported Wednesday a loss in its first quarter, compared to prior year's profit, mainly on higher fuel costs, even as revenues climbed on broad demand strength across corporate and leisure.

Looking ahead for the second quarter, the airline projects earnings with revenue growth on flat capacity, reflecting strong demand momentum, meaningful capacity reductions, and rapid actions to recapture higher fuel.

Shares of Delta Air Lines were climbing around 13 percent in the pre-market activity.

Ed Bastian, Delta's chief executive officer, stated, "Demand remains strong, and we are taking actions to protect our margins and cash flow. This includes meaningfully reducing capacity growth, with a downward bias until the fuel environment improves, and moving quickly to recapture higher fuel costs.... In the June quarter, we expect to lead the industry with $1 billion of profit. And while the recent fuel spike is currently impacting earnings, I'm confident this environment ultimately reinforces Delta's leadership and accelerates long-term earnings power."

Looking ahead for the second quarter, the airline projects earnings per share of $1.00 to $1.50, and operating margin of 6 percent to 8 percent, with total revenue growth in low-teens.

The company said it expects June quarter pre-tax profit of around $1 billion, on a more than $2 billion increase in fuel expense at the forward curve.

In the first quarter, net loss was $289 million or $0.44 per share, compared to prior year's net income of $240 million or $0.37 per share.

Adjusted net income was $423 million or $0.64 per share, compared to $291 million or $0.45 per share a year ago.

Operating income dropped 12 percent year-over-year to $501 million, while adjusted operating income grew 12 percent to $652 million. Adjusted operating margin improved to 4.6 percent from 4.5 percent a year ago.

Total operating expense for the quarter climbed 14 percent from last year to $15.35 billion, mainly on higher aircraft fuel and related taxes as well as refinery expenses.

Operating revenue grew 13 percent to $15.85 billion from last year's $14.04 billion. Adjusted operating revenue was $14.20 billion, a growth of 9.4 percent last year.

Passenger revenue increased 7 percent year-over-year to $12.30 billion, mainly on 14 percent rise in Ticket - Premium products and 9 percent increase in loyalty travel awards.

Cargo revenues increased 9 percent year-over-year to $226 million.

Revenue passenger miles grew 1 percent to 56.47 billion, and available seat miles increased 1 percent to 69.16 billion.

Passenger revenue per available seat mile rose 6 percent, and total revenue per available seat mile grew 12 percent.

Passenger load factor was 81.6 percent, up from 81.4 percent a year ago.

In pre-market activity, the shares were gaining around 12.48 percent to trade at $73.81.

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