Why Delta Airlines Stock May Take Off Ahead of Earnings - TheStreet

While unwinding the fuel hedges in 2015 Delta still nets an additional Billion dollars. For 2016 Delta Nets an additional 3 Billion dollars. A TEN Billion dollar year of profit is not out of the question in the next few years. Giving away any additional portion of profit sharing (beyond what was sold/given in C2012) would be the dumbest move ever performed by a union/labor group in the new millennium barring large hourly raises (30% THEN and only THEN an additional 50% raise to pay for the opportunity cost of giving up huge dollars that likely lay in store as part of future profit sharing checks). As others have mentioned the profits are on the verge of going through the roof with debt and debt interest payments shrinking to unimaginable levels, the benefits of consolidation and pricing power, and now low oil prices. Iran Sees ?No Threat? from Oil at $25 If Prices Keep Falling - Bloomberg

BBC News - Opec oil output will not be cut even if price hits $20


Whenever management wants to hurry up you know they stand to gain over the long haul by doing so. Please ALPA, just represent the pilots. Just represent, be transparent, stop with the clever lawyerly wording followed by full court press sales jobs of the past. The pilots you represent want to be proud of our union, to respect what they do and how they do it. Please be honorable, honest, forthright and represent the pilots. Stop talking in riddles (ie "mature contracts", "at risk compensation"). Clearly state and define what you are saying. Make clear goals and communicate them. Use CRM. Leave a legacy to be proud of. To the good men and women of our union who work singularly for the pilots and never waiver, thank you for all you do. I mean that.

Sailing if you took the time to read my post you would see I'm not sure if AA will come close to making $12 billion, but I feel very strongly they will make $8 billion and Delta will make $6 billion.

Any doubt in your mind the $5 billion debt goal will be met early?

Building on Ed's post.

Despite the stock's recent gains, its shares are cheap, trading at just four times trailing earnings, compared with an average price-to-earnings ratio of 19 for companies in the S&P 500 (SPY) . Not to mention airlines like United Continental (UAL) and Southwest Airlines (LUV) , which have P/E ratios of 45 and 23, respectively.

For this reason, and others, analysts have assigned Delta a consensus buy rating and an average price target of $60, suggesting 31% gains from Friday's closing price of $45.84. On average, analysts also expect Delta to grow earnings at an annual rate of 22% over the next five years. But Delta must do its part Tuesday to affirm Wall Street's confidence.

For the period ending in December, analysts will be looking for a profit of 75 cents a share, climbing 15% from last year's earnings of 65 cents a share. Estimates have jumped from where they were three months ago at 66 cents per share because of the drastic drop in oil. For the full year, analysts have projected earnings of $3.33 a share, up 6% year over year from $3.14 per share.

Analysts expect fourth-quarter revenue to climb 5.5% year-over-year to $9.58 billion, topping last year's mark of $9.08 billion. Full-year revenue is projected to be $40.3 billion, growing 6.7% year over year.

What stands out in these projections is how strong a surge in earnings per share Delta is expected to report. That its fourth-quarter estimates have jumped to 75 cents from 66 cents a share should not be taken lightly.

Analysts understand that fuel costs account for a significant chunk of Delta's operating expenses. And with prices on the decline, the money saved will trickle to the company's bottom line -- and that's a good thing not only for Delta, but also shareholders.

Aside from helping Delta grow its cash flow, the cost savings also give the company the ability do things like buy back stock and boost its dividend.

All told, this quarter will set the tone for how Delta and other airlines will benefit from weak oil. But unlike its peers, Delta is trading at a significant discount based on its projected earnings. That makes Delta, which pays a dividend yield of 0.79%, one of the best bargains on the market.

Imagine our annual profit sharing as Delta's profits increase 22% per year for the next 5 years.

we are in the fight of our careers to keep the insiders from giving this away.

Insanity

Jerry, can you provide the name of a single rep who wants to give profit sharing away or has made such a statement?

Delta's pre-tax income for the December 2014 quarter was $1.0 billion, excluding special items1, an increase of $474 million over the December 2013 quarter on a similar basis. Delta's net income for the December 2014 quarter was $649 million, or $0.78 per diluted share, and its operating margin was 12.6 percent, excluding special items.
For the full year 2014, Delta's pre-tax income, excluding special items, was $4.5 billion, a $1.9 billion increase over 2013. Delta's net income for the year was $2.8 billion with an operating margin of 13.1 percent, excluding special items.
On a GAAP basis including special items, Delta's December quarter pre-tax loss was $1.1 billion, operating margin was -8.6 percent and net loss was $712 million, or $0.86 per share. On a GAAP basis including special items, Delta's 2014 pre-tax income was $1.1 billion, operating margin was 5.5 percent and net income was $659 million.
2014 results include $1.1 billion in profit sharing expense, including $262 million in the December quarter, recognizing Delta employees' contributions toward meeting the company's financial goals.
The company's strong cash generation allowed it to accelerate its capital deployment plans by reducing its adjusted net debt2 to $7.3 billion, contributing an incremental $250 million above required funding to its defined benefit pension plans, and returning $1.35 billion to shareholders through a combination of $251 million of dividends and $1.1 billion of share repurchases in 2014.

Not to speak for him but I don't think it's so much as giving it away as selling it. Jerry is, as many of us are, skeptical of what that sale price would be.

Again, I heard yesterday, "at-risk income... we've already established it's for sale (C2012)". That "for sale" can mean a lot of things, amirite? I mean it could be good, I am open to that possibility, doubtful it'd be good, but open.

So SF, what would you sell profit sharing for and how much of it would you sell for a raise? I think that's a legit question to have and for DALPA to ask. I'd need to see some numbers though on what PS would be for the next 5 years... using rosy predictions only.

I can name several who want to sell it for pennies on the dollar.

Quit playing a semantics game. That's management's job. Whose side are you on?

I broke it out.

Enormous profits just reported. Hear Richard talk about it.

Earnings call today. JAN 20th. 10:00 AM Eastern

Should be very interesting.

Don't forget to listen:

https://event.on24.com/eventRegistra...epage=register