Originally Posted by
deltabound
I'm not arguing here. I'm confused. And I am heavily biased towards any news that puts DAL in a good light.
However, I just don't understand why every release on various stock boards (google, yahoo, etc.) are reporting that the 3rd quarter earnings report made by Delta equates to a $130-$160 million dollar loss for the quarter. A loss that is far, far greater than what DAL lost during the 3rd quarter of last year.
DAL, however, on the company web page, is trumpeting their 3rd quarter report as a $50 million dollar profit.
Obviously, both can't be true. Please explain what I'm missing here.
I'm perfectly aware that DAL's cash position has increased. That doesn't mean it's from profits, however. DAL's cash position generally refers to liquidity, which is mainly immediate access to cash, borrowed or otherwise. Having access to borrowed cash is good, but it's certainly not profit.
If you exclude one time charges, then there was a $50 mm profit. The one time charges were $212 mm. About $80 mm was a paper write down (who cares), about $80 mm was for merger expenses (one time charges), and $50 mm for severance for early outs (due to over staffing from the merger). Those charges will unwind in the long term, so you look at the profit/loss without those charges to examine the long term health of the company. In this environment even a modest profit was good news. AMR had a loss around $250 mm excluding one time charges and they are a smaller company now.
In the worst recession I have ever seen, Delta is not burning through cash from flight operations. That is good, because when companies burn through cash they eventually land in bankruptcy court. Most of the debt Delta incurred was to replace other debt so they aren't running up the credit card. They are in the worst time of the merger, with expenses running high and revenue benefits relatively low. That formula will start to swap over next year with expenses unwinding and revenue benefits accelerating rapidly.
Hopefully, people can only get H1N1 once (or get vaccinated) so that impact will unwind next year also. Maybe that will cause us to stop the bleeding on Pacific operations.
Overall, not the time to pop open the champagne but maybe a Bud.