Delta Air Lines, Inc. (NYSE: DAL) disclosed
better than expected earnings for the third quarter. On a year-over-year basis, profit fell 4.3 percent hurt by 6 percent drop on
the top line.
The company reported net income of $1.259 billion for the September quarter, down from $1.315 billion in the year-ago quarter.
However, EPS rose marginally from $1.65 to $1.69. On an adjusted basis, the company would have earned $1.70 a share thus beating
the Street estimates of $1.64.
Delta Air Lines operating revenue fell 6 percent from $11.107 billion to $10.483 billion. While passenger revenue fell 5
percent, revenue from cargo dropped 15 percent from the previous year period.
CEO Ed Bastian commented, "Delta's resiliency stood out this quarter as we worked through the outage, continued revenue
headwinds, and volatile fuel prices to produce the industry's best operational reliability and service for our customers along with
solid margins, cash flows and returns for our owners. With our focus on building a more sustainable and durable business, we will
be taking a cautious approach to 2017 by keeping our capacity in line with the December quarter's 1 percent growth level."
Going forward, Delta expects a slight drop in margins for the fourth quarter since savings from weak fuel prices would be
completely compensated by drop in unit revenues. Currently, the company estimates operating margin of 14–16 percent with passenger
unit revenue expected to fall 3 – 5 percent.
At time of writing, the stock shed $0.37, or 0.94 percent, to $38.90 in pre-market trading.
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