RiddleEagle18
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Delta Air Lines Inc. (DAL: News ) on Tuesday reported a 51 percent increase in profit for the third quarter as strong revenue growth helped offset higher fuel costs and flat passenger traffic. However, excluding items, adjusted earnings missed analysts' expectations, while revenues topped their estimates.
The company's third-quarter net income was $549 million or $0.65 per share, up from $363 million or $0.43 per share in the year-ago period.
The company recorded special items totaling a $216 million charge in the latest quarter, primarily related to mark to market adjustments for open fuel hedges settling in future periods.
Excluding special items, Delta's net income for the latest quarter was $765 million or $0.91 per share. On average, fifteen analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.
Total operating revenue for the quarter rose 10 percent to $9.82 billion from $8.95 billion in the prior-year period and topped analysts' consensus estimate of $9.73 billion.
Passenger revenue for the quarter increased 10 percent to $8.57 billion. Passenger Revenue per Available Seat Mile or PRASM increased 11 percent to 13.54 cents, driven by a 11 percent improvement in yield. Passenger load factor was 86.1 percent, up 0.2 points compared with 85.9 percent a year ago.
Traffic in terms of revenue passenger miles declined 0.3 percent from the prior-year period to 54.50 billion, while capacity in terms of available seat miles declined 0.6 percent to 63.26 billion.
The airline's cargo revenue rose 13 percent to $257 million, on higher cargo yields. Other revenues were up 5 percent, reflecting higher third-party maintenance revenue.
Delta's average fuel price of $3.09 per gallon for the quarter represented a 35 percent increase over the prior-year period.
The airline's operating expense rose 13 percent from the prior-year quarter to $8.96 billion and includes a 42 percent surge in aircraft fuel and related taxes. The company noted that higher fuel prices increased fuel expense by $1 billion, which was partially offset by $97 million of settled fuel hedge gains.
As at September 30, Delta's adjusted net debt was $14.0 billion. The company said it remains on track to achieve its $10 billion adjusted net debt target in 2013.
Looking ahead to the fourth quarter, Delta forecasts operating margin to increase 5 to 7 percent and projects capital expenditures of $350 million.
Hank Halter, Delta's chief financial officer said, "We are beginning to gain traction with our cost reduction initiatives, slowing September quarter non-fuel cost growth to 3% on a 1% decline in capacity. With the initiatives we have in place, we remain on track to bring our non-fuel unit costs modestly above 2010 levels in the fourth quarter despite a significant reduction in capacity."
The company's third-quarter net income was $549 million or $0.65 per share, up from $363 million or $0.43 per share in the year-ago period.
The company recorded special items totaling a $216 million charge in the latest quarter, primarily related to mark to market adjustments for open fuel hedges settling in future periods.
Excluding special items, Delta's net income for the latest quarter was $765 million or $0.91 per share. On average, fifteen analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.
Total operating revenue for the quarter rose 10 percent to $9.82 billion from $8.95 billion in the prior-year period and topped analysts' consensus estimate of $9.73 billion.
Passenger revenue for the quarter increased 10 percent to $8.57 billion. Passenger Revenue per Available Seat Mile or PRASM increased 11 percent to 13.54 cents, driven by a 11 percent improvement in yield. Passenger load factor was 86.1 percent, up 0.2 points compared with 85.9 percent a year ago.
Traffic in terms of revenue passenger miles declined 0.3 percent from the prior-year period to 54.50 billion, while capacity in terms of available seat miles declined 0.6 percent to 63.26 billion.
The airline's cargo revenue rose 13 percent to $257 million, on higher cargo yields. Other revenues were up 5 percent, reflecting higher third-party maintenance revenue.
Delta's average fuel price of $3.09 per gallon for the quarter represented a 35 percent increase over the prior-year period.
The airline's operating expense rose 13 percent from the prior-year quarter to $8.96 billion and includes a 42 percent surge in aircraft fuel and related taxes. The company noted that higher fuel prices increased fuel expense by $1 billion, which was partially offset by $97 million of settled fuel hedge gains.
As at September 30, Delta's adjusted net debt was $14.0 billion. The company said it remains on track to achieve its $10 billion adjusted net debt target in 2013.
Looking ahead to the fourth quarter, Delta forecasts operating margin to increase 5 to 7 percent and projects capital expenditures of $350 million.
Hank Halter, Delta's chief financial officer said, "We are beginning to gain traction with our cost reduction initiatives, slowing September quarter non-fuel cost growth to 3% on a 1% decline in capacity. With the initiatives we have in place, we remain on track to bring our non-fuel unit costs modestly above 2010 levels in the fourth quarter despite a significant reduction in capacity."
