Delta Air Lines (DAL) Q1 2023 results

by The Insights

Airbus A330 Neo jumbo jet for Delta Airlines being tested in Toulouse, France.

Nurphoto | Nurphoto | Getty Images

Delta Airlines posted a bigger-than-expected loss for the first three months of the year, but forecast second-quarter revenue and profit growth that beat analysts’ estimates, signaling strong travel demand despite weak earnings. other sectors.

The Atlanta-based carrier said it expects current quarter sales to grow 15% to 17% from a year ago, with adjusted operating margins of up to 16% and a adjusted earnings per share between $2 and $2.25. Analysts polled by Refinitiv had forecast second-quarter EPS of $1.66.

Delta said it plans to increase capacity by 17% in the second quarter from a year earlier.

But for the first quarter, adjusted revenue and adjusted earnings were below analysts’ estimates. Unit costs, excluding fuel, increased by 4.7% over the year, partly due to winter storms which paralyzed flights.

Here’s how Delta fared in the period ending March 31, relative to Wall Street expectations based on consensus estimates from Refinitiv:

  • Adjusted earnings per share: 25 cents against 30 cents expected.
  • Adjusted revenue: $11.84 billion vs $11.99 billion expected.

U.S. carriers typically make the bulk of their revenue during the busy spring and summer travel season, and Delta’s outlook points to stronger travel demand and pricing power.

The airline said sales of premium cabins like first class exceeded revenue from standard coaches.

Shares of Delta rose more than 2% in premarket trading.

In the first quarter, Delta reported a net loss of $363 million, or 57 cents per share, citing, in part, a new four-year pilot contract that includes increases of 34%. That’s still an improvement from the year-ago period, when travel was up and the company posted a net loss of $940 million, or $1.48 per share.

Adjusting for one-time items, the company reported net income of $163 million, or 25 cents per share, compared to a loss of $748 million, or $1.23 per share, in the first quarter of 2022.

Delta executives will hold a call with analysts to discuss the results at 10 a.m.

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