Delta Sees $3 Bil In Cost Savings From Cheap Oil
BY GILLIAN RICH, INVESTOR'S BUSINESS DAILY

Delta Air Lines reported fourth-quarter results below analyst estimates Tuesday due to foreign currency headwinds, but the company sees another windfall from low oil prices.

Earnings jumped 51% in Q4 to $1.18 per share. Analysts polled by Thomson Reuters were expecting $1.19 per share. Revenue dipped 1.5% to $9.5 billion, under views for $9.6 billion.

Adjusted fuel expenses fell by $726 million on 40% lower market fuel prices. Delta's refinery produced a profit of $8 million. But as oil prices stay lower for longer, Delta said it could realize $3 billion in cost savings this year.

Delta shares climbed 2.4% to 45.56 in premarket trading in the the stock market today.

In Q4, passenger unit revenue fell 1.6%, which includes approximately 2 points of impact from foreign currency. Delta sees passenger revenue falling 2.5%-4.5% during Q1.

"The first half of 2016 will see the most pressure to nonfuel unit costs, and we expect performance will improve through the year as we lap last year's employee wage increases," said CFO Paul Jacobson in the earnings release.

Earlier this month, Delta and its peers raised one-way fares by $3.