Delta posts $765M profit in 3Q
 

(This has been discussed a little in "Latest & Greatest...", but I thought it was worthwhile to have a stand-alone thread on this. Although short of analyst expectations of $0.94/share, $0.91/share is darn good given a 42% increase in fuel costs to the company. BTW, Delta is the largest user of jet fuel in the world, according to company executives.)

Delta's Profit, Sales Rise - WSJ.com


By SUSAN CAREY

Delta Air Lines Inc., lifted by strong revenue performance that helped offset a rising fuel bill, was profitable in the third quarter and expects to be in the black in the current quarter, the company said Tuesday

Stripping out a $216 million markdown in the value of its fuel hedges that settle in the future and a $31 million foreign-exchange loss, Delta earned $765 million, or 91 cents a share, in the latest quarter. That missed FastSet's estimate of 94 cents a share, but revenue exceeded expectations, rising 10% to $9.8 million, and the carrier's operating margin was 11%.

Shares of Delta were down 4.4% Tuesday in late morning trading on the New York Stock Exchange, trading at $8.51.

The Atlanta-based airline, the nation's second-largest by traffic after United Continental Holdings Inc., earned $549 million, or 65 cents a share, including the unusual items. A year ago, including $566 million in one-time items, Delta had a profit of $363 million, or 43 cents a share. Overall costs rose 13% to $8.9 billion, led by a 42% increase in its fuel tab.

Richard Anderson, Delta's chief executive, said the company encountered "strong demand, particularly from corporate customers," in the third quarter and expects that to continue in the current quarter. Delta's unit revenue, or the amount taken in for each passenger flown a mile, rose 11% in the third quarter, and was up 10% in October.

Ed Bastian, the president, said while growth in demand for flights across the Atlantic is slowing due to economic pressures in Europe, it still is growing. Over the past month, corporate bookings from the banking sector declined 4% from a year ago. But bookings from consulting and business-services clients, a much larger part of Delta's corporate business on transatlantic routes, rose 24% in the past month compared with a year earlier, he said. Meanwhile, revenue from bookings generated in Japan has recovered from pre-earthquake levels. U.S.-originating bookings to Japan still lag by 10% to 15% from levels seen before the quake and tsunami, positioning the airline for "a strong recovery" in Japan in 2012.

Delta said it is holding the line on capacity growth and working to wring other costs out of its operations, including retiring older aircraft, consolidating its facilities and reducing employee head count through voluntary departures. The company said it will slice its fourth-quarter capacity by 4% to 5% compared with the year-ago period, but also hopes to hold its unit costs to flat to up 2% compared with the year earlier.

For the fourth quarter, Delta expects to product an operating margin of 5% to 7%. For all of 2012, it foresees trimming capacity by 2% to 3% over the seats offered for all of this year. The company ended the quarter with $5.1 billion in cash.

Write to Susan Carey at [email protected]

time to ask the pilot union for some concessions!!! :confused:

Congrats Delta. One can only wonder what sort of profit (loss) Delta would have shown without subsidies provided by Alaska Airlines.

I know!! It's amazing!! Outsourcing to cheaper labor works!!

Congrats, beloved partner Alaska, on your record profit and record growth!!

Probably would have made more money. ;)

Um....excuse me, but last time I checked Alaska pilots were making a higher hourly wage than Delta pilots on the same piece of equipment. In fact, except for your two or three largest planes at Delta, Alaska pilots are outearning Delta pilots. Please explain the "cheaper" labor costs you referenced to me. I may have been born in a barn, but I wasn't born yesterday!

There is no money on the west coast. We desperately need the feed though, but we can't compete out there. No airline can. Remember when we bought feed out there and dismantled it? That proves its a dead zone market for all eternity. Only AK can compete, no other airline. Well and SWA with their significantly higher pilot costs and lower per pilot revenues. And VX, but we should ignore them until they build critical mass and then we can yield marketshare to them as well, perhaps in a code share. And UA as well but that's it. Well and JB. But that's really it. No other airline can make money on the west coast but if you allow us to outsource basically as many 737-900's as we want we will add a few wide body flights. Winning!

Its cheaper than having to compete. We get that you like this arrangement. But your scope is weaker than ours is and one day you will see what that means.*


*hopefully you will have fixed it by then but many pilot groups haven't been able to crack that code.

I'm not really sure peastain is Alaska btw.

Where is Pineapple guy, the accountant? I want him to tell me again why we shouldn't get big raises? Something about the RASM? How'd we do in Q3 when it came to RASM?