Delta flies higher after beating Q2 earnings expectations, raises full-year outlook

delta earnings

Delta Air Lines, Inc. (NYSE: DAL) reported second-quarter financial results before markets opened on the Thursday. The third-biggest U.S. carrier posted better-than-expected earnings and record revenue driven by supply constraints due to the grounding of Boeing 737 Max jets at key rivals.

Delta also upped its 2019 profit guidance as well as its quarterly dividend by 15% to $0.4025 per share. As of 2:00 p.m. ET shares of the Atlanta-based company were up 1.37% to change hands at 60.30 apiece. The stock has gained more than 21% since the beginning of the year.

DAL Earnings & Outlook

Delta had a profit of $407 million higher than a year ago. Excluding one-time costs and gains, the company earned $1.53 billion, or $2.35 per share in the quarter. Analysts surveyed by Refinitiv were expecting the airline to post adjusted earnings of $2.28 per share.

Revenue for the three months ended June 30 came to $12.54 billion, up 8.7% from the same period last year. Adjusted total unit revenue rose 3.8% thanks in part to an approximate one-point benefit from the amended American Express agreement announced earlier this year, as well as healthy growth in corporate and leisure revenue.

Average fuel costs fell 4.14% to $2.08 per gallon during the quarter. Premium product ticket revenue jumped 10% on a year-over-year basis, while cargo revenue declined 17%. Delta said capacity revenue climbed 5.1%, while overall domestic revenue rose 8.8%.

Looking ahead, the airline expects to post profit of between $6.75 to $7.25 per share for the full year, compared with its previous guidance of $6 to $7 per share.

Delta Air Lines CEO Comments

“Our record June quarter financial and operating results demonstrate that we are translating our powerful brand and competitive advantages into earnings growth, margin expansion and solid returns for our owners. Our people are the best in the business and I’m proud to recognize their hard work and dedication this quarter with an additional $518 million toward next year’s profit sharing,” commented Ed Bastian, Delta’s chief executive officer.

“With our strong first half performance and building momentum from our customer-focused initiatives, we are increasing our full-year earnings guidance to $6.75 to $7.25 per share,” Bastian added.

Delta Air Lines, Inc Profile

Atlanta-based Delta Air Lines is one of the world’s largest airlines, flying to more than 325 destinations in 60 countries. Delta operates a hub-and-spoke system, where it gathers and distributes passengers across the globe through key locations in Atlanta, New York, Salt Lake City, Detroit, Seattle, and Minneapolis-St. Paul.

Delta generated just over $41 billion in revenue during 2017 and operated a mainline fleet of 856 aircraft at year-end 2017. – Warrior Trading News