Delta profit beats expectations, says third-quarter results hurt by storms
FILE PHOTO - A Delta Airlines aircraft lines up for take off at BWI Thurgood Marshall International Airport near Baltimore, Maryland, U.S. on October 24, 2012.
REUTERS/Gary Cameron/File Photo
NEW YORK: Delta Air Lines' third-quarter adjusted pre-tax income fell 9.5 percent to US$1.7 billion compared to the year prior, hit by a US$120 million negative impact from Hurricane Irma in September, the company said on Wednesday.The No. 2 U.S. carrier by passenger traffic said its quarterly operating revenue rose 5.5 percent to US$11.1 billion, in spite of a US$140 million reduction from the storm.Despite the storm-related impact, Delta beat analyst expectations. Its adjusted earnings per share were US$1.57 versus the consensus forecast of US$1.53 per share, according to Thomson Reuters I/B/E/S.Delta's shares rallied in pre-market trading on the better-than-expected quarterly results.Investors had been worried that the brutal hurricane season, which included three back-to-back storms and resulted in thousands of canceled flights, would have weighed more heavily on the carrier's profitability.Delta's quarterly passenger unit revenue rose 1.9 percent on 1.6 percent higher capacity. Its passenger revenue increased US$328 million, including US$160 million from fare segmentation initiatives.
Excluding the impact from the storms, the metric rose within the company's original guidance."Having just completed the busiest summer travel season in our history, we have good momentum, a determined team and a solid pipeline of initiatives to grow earnings and margins," Delta Chief Executive Officer Ed Bastian said in a statement.The carrier forecast it would increase its fourth-quarter year-over-year passenger unit revenue by between 2 percent and 4 percent and have an operating margin of between 11 percent and 13 percent.(Reporting by Alana Wise; Editing by W Simon and Bill Trott)