Earnings Preview: Delta Air Lines - Yahoo! Finance

Earnings Preview: Delta Air Lines

Delta Air Lines expected to report 3Q profit and revenue growth on Wednesday

Monday October 18, 2010, 2:40 pm
ATLANTA (AP) -- Delta Air Lines Inc. reports third-quarter results before the market opens Wednesday.
WHAT TO WATCH FOR: Airlines can make money when the right ingredients are in place, and that was true during the third quarter. Fuel prices were basically flat. Airlines are running lean and disciplined operations, driven first by the oil spike of 2008, and then by the recession. Demand is recovering.
But investors will want to know what Delta's next trick is. Its two-year reign as the world's biggest airline is over. Investors will want to hear more about Delta's plans to compete with the new United Continental Holdings over the long run.
Barclays Capital analyst Gary Chase wrote that he expects the fourth quarter to be solid, too, and airlines should be able to generate cash next year. Current airline share prices don't reflect the industry's good prospects for next year, he wrote.
In the short run, investors will look for an update on whether travel demand continues to recover.
WHY IT MATTERS: Delta is still one of the world's biggest airlines, and travel demand is a good indicator of the direction of the economy. That makes it a good bellwether for air travel as well as a good indicator for the strength of the economic recovery.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect Delta to report a profit of 94 cents per share on revenue of $8.82 billion.
LAST YEAR'S QUARTER: Delta lost $161 million, or 19 cents a share. Not counting certain items, it recorded an adjusted profit of $51 million, or 6 cents per share. Revenue was $7.6 billion.