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Delta Air Lines Reports Better Than Expected Q4 Earnings; Lifts FY18 Earnings View

(Correction: The original article provided an incorrect analyst estimate.)

Delta Air Lines (DAL) reported Thursday that its fourth-quarter net income declined to $572 million or $0.80 per share from last year's $622 million or $0.84 per share.

As a result of the Tax Cuts and Jobs Act of 2017, Delta recognized a one-time charge of $150 million in the December quarter from the estimated impact of the inclusion of foreign earnings and revaluation of deferred tax assets and liabilities.

The results also included mark-to-market adjustments on fuel hedges.

Adjusted net income was $681 million or $0.96 per share, compared to $604 million or $0.82 per share a year ago.

On average, analysts polled by Thomson Reuters expected earnings of $0.88 per share. Analysts' estimates typically exclude special items.

Adjusted pre-tax income for the December 2017 quarter was $1.0 billion, compared to $923 million last year, despite a $60 million impact from the combination of December's power outage at Atlanta's Hartsfield-Jackson Airport and Winter Storm Benji.

Delta's operating revenue of $10.25 billion was up 8.3 percent from prior year's $9.46 billion. Total unit revenues excluding refinery sales increased 4.4 percent.

Passenger revenue increased $527 million, including $200 million from Delta's Branded Fares initiatives. Passenger unit revenues increased 4.2 percent.

Cargo revenue increased 14.4 percent, driven by higher volumes and yields.

Ed Bastian, Delta's chief executive officer, said, "Looking ahead to 2018, we expect to drive solid earnings growth by growing our top line 4 to 6 percent, improving our cost trajectory and integrating our international partner network. As a result, we are able to increase our previous full-year guidance to $6.35 to $6.70 per share due to additional benefits from tax reform."

For the March quarter, Delta is expecting improving revenues and the benefit from tax reform to partially offset fuel cost increases and the period of highest non-fuel expense growth for the year.

For the first quarter, the company expects earnings per share of $0.60 to $0.80, total unit revenue excluding refinery sales to grow 2.5% to 4.5% and system capacity growth of around 3 percent.

For 2018, Delta expects the reduction in the corporate tax rate will result in an all-in book tax rate for the company of 22-24 percent.

In pre-market activity, Delta shares were gaining 3.6 percent to trade at $57.90.

by RTT Staff Writer

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