Delta Q1 Loss Narrows; Sees Q2 Earnings Above Market, Backs FY23 View

Delta Air Lines, Inc. reported Thursday narrower net loss in its first quarter with strong growth in revenues. Adjusted earnings missed market estimates. Further, the company issued second-quarter outlook, expecting adjusted earnings above market with strong revenues, and also reiterated fiscal 2023 view. In pre-market activity on Nasdaq, the shares were gaining around 4 percent.

Glen Hauenstein, Delta’s president, said, “We delivered record March quarter revenue with total unit revenue that was 16 percent higher than the same period in 2019. These results reflect the strength in the underlying demand environment and continued momentum in premium products and loyalty revenue. With record advance bookings for the summer, we expect June quarter revenue to be 15 to 17 percent higher on capacity growth of 17 percent year over year.”

For the second quarter, the company projects adjusted earnings per share of $2.00 to $2.25, revenue growth of 15 percent to 17 percent and an adjusted operating margin of 14 to 16 percent.

On average, 16 analysts polled by Thomson Reuters expect earnings of $1.65 per share for the quarter. Analysts’ estimates typically exclude special items.

For fiscal 2023, the company continues to expect adjusted earnings per share of $5 to $6, revenue growth of 15 percent to 20 percent and an adjusted operating margin of 10 to 12 percent. Analysts expect earnings of $5.39 per share for the year.

In the first quarter, Delta’s net loss was $363 million, compared to loss of $940 million in the same period last year.

Loss per share was $0.57, narrower than prior year’s loss of $1.48 per share.

Adjusted earnings were $163 million or $0.25 per share for the period, compared to last year’s loss of $784 million or $1.23 per share. Analysts expected earnings of $0.30 per share for the quarter.

Operating revenue climbed 36 percent to $12.76 billion from last year’s $9.35 billion.

Adjusted operating revenue was $11.8 billion, 45 percent higher than last year, and 14 percent higher than the pre-pandemic 2019, including a 1 point impact from flying lower capacity than initially planned.

Analysts expected revenues of $11.98 billion for the quarter.

Total Passenger revenue of $10.41 billion climbed 51 percent, while Cargo revenue fell 28 percent to $209 million.

Total revenue per available seat mile or TRASM was 20.80 cents, up 15 percent from the prior year. Reflecting strong demand, March quarter advance cash bookings were nearly 20 percent higher than 2019.

In pre-market activity on Nasdaq, Delta shares were trading at $35.15, up 4.18 percent.

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