Delta Air Lines, Inc. Reports In-Line Q1 Earnings But Pre-Tax Income Plunges 46%

Written by StockNews.com

Delta Air Lines, Inc. (NYSE: DAL) early Wednesday [Apr 12, 2017, | 7:30am] posted in-line first quarter earnings results and offered a solid outlook for the second quarter as it recovers from disruptions resulting from some recent severe…[storms] in the Atlanta area [which will] reduce its Q2 pre-tax income by $125 million.

The Atlanta-based airline operator reported:

Q1 earnings per share (EPS) of $0.77, which was $0.02 better than the Wall Street consensus estimate of $0.75.

Revenues fell 1.1% from last year to $9.15 billion, slightly ahead of analysts’ view for $9.14 billion.

Passenger unit revenues declined 0.5% in the period, on 0.5% percent lower capacity. The company had preannounced these results previously.

Higher fuel prices caused Q1 adjusted pre-tax income to plunge 46% to $847 million.

Looking ahead, Delta forecast:

Q2 PRASM to rise between 1% and 3%,

with operating margins, if 17% to 19%,

and capacity rising 0% to 1%.

Glen Hauenstein, Delta’s president, commented on its latest result via press release:

“March marked the first month of positive passenger unit revenues since November 2015 and we are encouraged by the current fare and demand trends across the network.

We expect June quarter passenger unit revenues to increase one to 3% and remain positive throughout the year, however, we will keep our full year capacity growth capped at 1% to support this unit revenue momentum and the company’s return to margin expansion.”

Finally, Delta addressed the numerous Atlanta-area disruptions it suffered last week. Severe weather in Atlanta caused it to cancel about 4,000 flights, and the company didn’t return to normal operations until Sunday afternoon. DAL said the storm’s effects will reduce its Q2 pre-tax income by $125 million.

…Year-to-date, DAL has declined -7.56%, versus a 5.62% rise in the benchmark S&P 500 index during the same period.