Airbus A330 Neo widebody aircraft meant for Delta airlines being tested in Toulouse, France.
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Delta Air Lines posted a wider loss than it previously estimated for the primary three months of the yr but forecast revenue growth and profits for the second quarter that were ahead of analysts’ estimates, signaling strong travel demand despite weakness in other sectors.
The Atlanta-based carrier said it expects sales in the present quarter to extend by 15% to 17% over last yr, with adjusted operating margins of as much as 16% and adjusted earnings per share of between $2 to $2.25. Analysts polled by Refinitiv had anticipated second-quarter revenue growth of 14.7% and earnings per share of $1.66. The airline projected “record advance bookings for the summer.”
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Delta said it plans to grow capability 17% within the second quarter from a yr earlier.
But for the primary quarter, adjusted revenue and adjusted earnings got here in below analyst estimates. Unit costs, excluding fuel were up 4.7% on the yr, partly driven by winter storms that grounded flights.
U.S. carriers generally make the majority of their revenue through the busy spring and summer travel season and Delta’s outlook points to more strength in travel demand, and its strong pricing power. Delta is the primary U.S. carrier to report earnings. United Airlines will report on Tuesday, and American Airlines and Southwest Airlines will follow the week after.
Delta said its corporate bookings have been recovering, with domestic sales in March 85% back to 2019 levels. It also got a lift in its loyalty program, with its co-branded bank card partnership with American Express contributing $1.7 billion within the last quarter, up 38% from last yr, Delta said.
The airline said sales from premium cabins like top quality were outpacing revenue from standard coach.
Delta shares were up greater than 4% in premarket trading.
Here’s how Delta performed within the period, ended March 31, compared with Wall Street expectations based on Refinitiv consensus estimates:
- Adjusted earnings per share: 25 cents vs. 30 cents expected.
- Adjusted revenue: $11.84 billion vs. $11.99 billion expected.
In the primary quarter, Delta posted a net lack of $363 million, or 57 cents per share, citing, partly, a recent, four-year pilot contract that features 34% raises. That is still improvement from the year-ago period, when travel demand was still recovering and the corporate reported a net lack of $940 million, or $1.48 per share.
Adjusting for one-time items, the corporate reported net income of $163 million, or 25 cents per share, up from a lack of $748 million, or $1.23 per share, through the first quarter of 2022.
Delta executives will hold a call with analysts to debate results at 10 a.m.