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Delta Airlines The company reported its highest-ever quarterly revenue and earnings after defying concerns about an economic slowdown for months amid buoyant travel demand.
International travel and demand for premium seats like first class were prominent, while Delta’s fuel costs fell 22% in the three months ended June 30, boosting the airline’s bottom line.
The Atlanta-based airline on Thursday raised its 2023 profit forecast to an adjusted $6 to $7 per share, up from the upper end of the $5 to $6 per share range forecast last month.
Delta Air Lines shares rose more than 3% in premarket trading after the results were announced.
Here’s how Delta’s performance in the quarter ended June 30 compares to Wall Street expectations based on Refinitiv consensus forecasts:
- Adjusted earnings per share: $2.68, compared with $2.40 expected.
- Adjusted Income: $14.61 billion compared with expectations for $14.49 billion.
Delta Air Lines was the first U.S. airline to report second-quarter results, and its report set an upbeat tone for the rest of the year.
Chief Executive Ed Bastian said he expects consumers’ desire to travel will drive bookings for years to come.
“I think the trends we’ve seen this year will continue,” he said in an interview.
Delta expects third-quarter earnings per share of $2.20 to $2.50, topping analysts’ forecasts and a 16% increase in capacity. The airline expects revenue to rise 14% from a year earlier.
For the three months ended June 30, Delta earned $14.61 billion in revenue (excluding refinery sales), up 19% from a year earlier and above analysts’ expectations. Earnings of $2.68 per share also beat analysts’ expectations and were up from $1.44 a year earlier.
The airline’s net profit of $1.83 billion was the highest since the fourth quarter of 2013, when it put more than $8 billion in tax-loss credits back on its balance sheet. Total revenue was US$15.58 billion, up 13% year-over-year.
Transatlantic travel was particularly strong in the spring and early summer, with revenues from these trips up more than 60% year-over-year, while domestic revenues were up 8% and overall passenger revenues were up 21%. Delta and its rivals have increased capacity to Europe this year in response to the economic recovery. (Bastian told CNBC he recently traveled to the south of France.)
Growth in premium ticket revenue also outpaced growth in economy-class sales.
Unit revenue, a measure of how much an airline generates per seat per mile flown, rose 1% year-over-year, and capacity rose 17%.
“If you ask us in which quarter we grew double digits in capacity and we maintained our overall pricing, that would be pretty amazing,” Bastian said.