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Delta Air Lines Q3 Profit Down; Sees Continued Pressure On Q4 Margins


Delta Air Lines Inc. (DAL,DALRQ.PK) reported a profit for the third-quarter that decreased 6.4 percent from last year. But total operating revenue was up 5.5 percent, despite a $140 million reduction from Hurricane Irma.

"While we faced a number of challenges this quarter, including multiple hurricanes and an earthquake in Mexico, I am proud of how Delta people responded and still delivered an outstanding performance this quarter," said Ed Bastian, Delta's chief executive officer.

Looking ahead for the fourth quarter, the company expects unit revenues to be up two to four percent with all entities in positive territory by year end, it expects continued pressure on margins as its unit revenue momentum catches up to the rise in fuel prices that began in July.

In Wednesday's pre-market trade, DAL is trading at $53.50, up $0.78 or 1.48%.

Net income for the third-quarter declined 6.4 percent to $1.18 billion from last year's $1.26 billion, with earnings per share decreasing to $1.64 from $1.69 in the previous year.

Adjusted pre-tax income for the quarter was $1.7 billion, a $182 million decrease from the prior year. Pre-tax income included a $120 million reduction from the operational disruption following Hurricane Irma that hit the Caribbean, Florida, Georgia and, specifically, Delta's hub in Atlanta.

Adjusted net income was $1.13 billion or $1.57 per share, compared to $1.26 billion or $1.70 per share in the previous year.

Total operating revenue was $11.1 billion, up 5.5 percent, or $577 million versus prior year, despite a $140 million reduction from Hurricane Irma.

Passenger revenue increased $328 million, including $160 million from Delta's Branded Fares initiatives. Passenger unit revenues increased 1.9 percent on 1.6 percent higher capacity. 

Cargo revenue increased 11.5 percent, driven by higher volumes in freight and mail.  Other revenue increased 18.4 percent primarily due to higher loyalty revenue and third-party refinery sales.

by RTTNews Staff Writer

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