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Delta Air Lines revenue soars, but profit dented by fuel price, storms


By Alana Wise

(Reuters) - Air Lines Inc on Thursday reported quarterly results that exceeded Wall Street expectations in several key metrics, spurring an advance in shares of the company and others in the industry in premarket trading.

reported earnings per share of 77 cents, topping analysts' average estimate of 73 cents per share, according to Thompson I/B/E/S. Shares of the Atlanta-based gained 2.7 percent before the U.S. stock market opened.

The nation's second-largest carrier by passenger traffic posted a 9.5 percent rise in quarterly revenue, boosted by higher average fares and passenger traffic.

However, net income fell to $547 million in the first quarter ended March 31 from $561 million a year earlier, weighed by a spike in fuel prices and a $44 million negative impact from severe winter storms.

Total operating revenue for the first quarter rose to $9.97 billion from $9.10 billion, and the - a key metric which compares sales with flight capacity - would increase 3 percent to 5 percent in the second quarter.

"We are seeing Delta's best revenue momentum since 2014, with positive domestic unit revenues, improvements in all our international entities, strong demand for and double-digit increases in our loyalty revenues," said

"We expect to maintain this momentum and deliver total revenue growth of 4 to 6 percent for the full year."

Looking to the second quarter, Delta expects improving costs and a reduction in the U.S. corporate tax rate to help mitigate the impact of soaring fuel prices. The carrier forecast an increase in quarterly unit costs, excluding fuel and profit sharing, of 1 percent to 3 percent compared to the preceding year.

In the quarter through March, Delta said operating expenses had swelled by $817 million from the previous quarter, driven by higher fuel and labor costs, and a higher depreciation expense.

Still, Delta said it was still on track to reach its target goal of flat to 2 percent growth in full-year unit costs.

(Reporting by Alana in New York and Arunima Banerjee in Bengaluru; Editing by and Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 20:56 IST