Delta’s 2019 Earnings Exceeds Expectations

Shares in Delta Air Lines blew up on Tuesday morning upon the news that the Atlanta-based carrier posed fourth-quarter earnings that exceeded Wall Street expectations.

In early trading, the stock price was up 4.5%, its highest levels since July according to MarketInsider.

“2019 was a truly outstanding year on all fronts – the best in Delta’s history operationally, financially and for our customers,” CEO Ed Bastian said in Delta’s earnings report. “As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75.”
Right now, Delta can do no wrong in the eyes of The Street. The airline has 12 “buy” ratings, nine “hold” ratings, and no “sell” ratings from analysts, with a consensus price target of $67.71, according to Bloomberg data culled by MarketInsider.

Revenue was up to $11.44 billion from last year’s $11.34 billion, and adjusted earnings per share were way up, to $1.70 from the $1.40 consensus estimate and $1.52 highest estimate.

In fact, Delta was so profitable that Bastian said it plans to pay out a record $1.6 billion in profit sharing to its employees this year – an average of two months salary per employee to be paid out on Valentine’s Day.

It’s the sixth consecutive year that Delta will pay out more than $1 billion in profit sharing to employees.

“For years, I would get beaten up by Wall Street. They thought the profits were theirs, and ‘Why are you giving the profits away to the employees?’” Bastian said according to the Atlanta Journal-Constitution. “Wall Street has actually come full circle, and they realize that Delta is the most awarded airline in the world because of its employees.”

Bastian was recently in Las Vegas for CES 2020 and he seemed quite confident the airline would be able to one day deliver free WiFi on all flights. Perhaps now we know why the confidence is so high.