Delta Air Lines reports quarterly profit and higher-than-expected revenue for Q3
Delta Air Lines on Wednesday Oct. 13 reported a quarterly profit and higher-than-expected revenue for the third quarter, but warned that higher fuel costs could pressure its bottom line in late 2021 despite improving travel demand.
The Atlanta-based airline said it expects revenue to continue to recover during the last three months of the year, to a little bit less than three-quarters of the $11.4 billion it brought in in the same quarter in 2019, before the pandemic. Here’s how it performed compared with average analysts’ estimates compiled by Refinitiv:
Adjusted earnings per share: 30 cents versus 17 cents expected.
Revenue: $9.15 billion versus $8.4 billion expected.
Delta’s third-quarter profit of $1.2 billion, which was down 19% from 2019, was its second profit since the pandemic but the first one without U.S. aid. Delta and other airlines received billions of dollars in federal assistance to keep them afloat during the pandemic. Delta’s revenue of $9.15 billion also exceeded analysts’ expectations of $8.4 billion.
The industry has been providing earnings comparisons to 2019, before the pandemic hit.
The carrier said it expects its costs, before fuel expenses, to rise 6% to 8% in the fourth quarter as it ramps up flying. Delta said it would fly 80% of its 2019 capacity, up from 71% in the most recent quarter.
It expects fuel prices to rise to $2.25 to $2.40, from the average $1.97 a gallon in the third quarter.
“While demand continues to improve, the recent rise in fuel prices will pressure our ability to remain profitable for the December quarter,” Delta’s CEO Ed Bastian said in an earnings release. “As the recovery progresses, I am confident in our path to sustained profitability as we continue to provide best-in-class service to our customers, strengthen preference for our brand, while creating a simpler, more efficient airline.”
Delta’s shares were down 1.3% in premarket trading, more than other carriers. cnbc.com