CEO Ed Bastian said the carrier expects “meaningful full year profitability” after a challenging second quarter.
Delta Air Lines (DAL) – Get Delta Air Lines Inc. Report posted softer-than-expected second quarter earnings Wednesday as fuel, staff overtime and customer re-booking costs ate into the carrier’s bottom line.
Delta said adjusted earnings for the three months ending in June were pegged at $1.44 per share, up from a loss of $1.07 per share over the same period last year but well shy of the Street consensus of $1.66 per share. Group revenues, Delta said, nearly doubled from last year to $13.84 billion, firmly ahead of analysts’ estimates of a $13.24 billion tally.
Delta’s operating margin came in at a lower-than-expected rate of 11.7%, thanks to surging jet fuel prices as well as costs linked to staff overtimes amid a chronic pilot shortage and charges tied to customer re-booking during the worst of the spring flight schedule disruptions.
Looking into the current quarter, Delta said its sees revenue growth of between 1% and 5% from 2019 levels, but plans to cap capacity at June quarter levels.
“I would like to thank our entire team for their outstanding work during a challenging operating environment for the industry as we work to restore our best-in-class reliability,” said CEO Ed Bastian. “Their performance coupled with strong demand drove nearly $2 billion of free cash flow as well as profitability in the first half of the year, and we are accruing profit sharing, marking a great milestone for our people”.
“For the September quarter, we expect an adjusted operating margin of 11% to 13%, supporting our outlook for meaningful full year profitability,” he added.
Delta shares were marked 2.3% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $31.81 each.
