WOW. Better than expected performance. $4.0billion in cash, $155M operating profit and $461M in positive free cash flow after making pension contributions of $50M and capital expenses payments of $150M, with revenue strength in all geographic markets.
Delta Air Lines Reports $155 Million Operating Profit for March 2007 Quarter
Monday April 23, 8:00 am ET
ATLANTA, April 23, 2007 (PRIME NEWSWIRE) -- Delta Air Lines (Other OTC:DALRQ.PK - News) today reported results for the quarter ended March 31, 2007. Key points include: * Delta's operating profit for the March 2007 quarter was $155 million, the company's fourth consecutive quarterly operating profit. * Delta's first quarter net loss was $130 million. Excluding reorganization items, the net loss was $6 million. 1,2 * On April 16, 2007, Delta announced its creditors overwhelmingly support the company's plan of reorganization, with more than 95 percent of ballots cast in favor of the plan. * As of March 31, 2007, Delta had $4.0 billion in cash, cash equivalents and short-term investments, of which $2.9 billion was unrestricted.
Delta reported a net loss of $130 million in the first quarter of 2007, compared to a net loss of $2.1 billion in the first quarter of 2006. Excluding the reorganization and special items described below, the net loss was $6 million in the first quarter of 2007, a $350 million improvement compared to the net loss of $356 million in the first quarter of 2006. For the March 2007 quarter, Delta's operating income was $155 million and its operating margin was 3.7 percent -- an improvement of more than 8 points over the prior year period, excluding special items.
``The past 18 months have been challenging times and Delta people rose to that challenge. As these results show, much more has been done than improving our financial structure. Delta has fundamentally transformed into a thriving industry leader,'' said Gerald Grinstein, Delta's chief executive officer. ``We are stronger -- financially, operationally, and in spirit -- and Delta is ready to return to its traditional leadership position in this highly competitive industry.''
Financial Performance
Strong passenger demand, combined with Delta's network restructuring and revenue management initiatives, drove improvements in the company's revenue performance, with revenue strength seen in all geographic markets.
Delta's total international passenger unit revenue (PRASM) grew 6.4 percent year over year excluding special items, with the Latin and trans-Atlantic markets each seeing greater than 5 percent PRASM improvement on 32 and 22 percent capacity increases, respectively. Domestic markets also showed solid PRASM performance, with domestic PRASM up 6.3 percent excluding special items on 5.4 percent lower capacity. With the change in mix of domestic and international flying, Delta's consolidated PRASM increased 4.5 percent in the March 2007 quarter compared to the same period in 2006, excluding special items.
Delta's length of haul adjusted PRASM increased 6.1 percent for the first quarter 2007 versus first quarter 2006. This increase was 4 points higher than the industry average PRASM (excluding Delta) increase of 2.1% over the same period.
Additionally, Delta continued to generate cost reductions from its restructuring. For the March 2007 quarter, Delta's operating expenses decreased 2.3 percent, or $94 million, despite a 2.0 percent increase in capacity, compared to the March 2006 quarter, excluding special items. For the same period, non-operating expenses decreased 20.3 percent, or $41 million, due to lower interest expense from lower debt levels and mark-to-market gains on fuel hedges. Delta's mainline unit costs in the first quarter of 2007 decreased by 6.3 percent compared to the first quarter of 2006, excluding special items. Excluding fuel(3) and special items, mainline unit costs decreased 8.7 percent over the prior year period.
Delta's March quarter 2006 results included $1.7 billion in non-cash charges for reorganization and special items. Including those items, March 2007 quarter PRASM increased 7.1 percent, operating expenses decreased 5.1 percent (or $215 million), and mainline unit costs decreased 9.8 percent, as compared to the March 2006 quarter.
At March 31, 2007, Delta had $4.0 billion in cash, cash equivalents and short-term investments, of which $2.9 billion was unrestricted. During the March 2007 quarter, Delta generated $461 million in free cash flow, after a $50 million contribution to its defined benefit pension plan and more than $150 million in capital expenditures to reinvest in its business.
``Our financial performance this quarter -- both operating margin improvement and liquidity -- exceeded expectations under our plan,'' said Edward H. Bastian, Delta's executive vice president and chief financial officer. ``As we emerge from bankruptcy, we are well positioned to build on the momentum of our restructuring with best-in-class costs, improving revenue performance, a strong balance sheet, and the premiere workforce in the industry.''
Operational Performance
In the March 2007 quarter, despite severe weather in the Northeast, Delta employees worked together to deliver a DOT on time arrival rate of 78.1 percent and completion factor of 98.0 percent for the quarter. Delta employees earned Shared Reward payments in the quarter in recognition of the strong performance in on time arrival rate and completion factor, as well as customer satisfaction.
``In overcoming the weather challenges this quarter, Delta people stepped to the plate to deliver both industry leading operational performance and the highest level of service to our customers,'' said Jim Whitehurst, Delta's chief operating officer. ``As part of our customer service commitment this year, we will continue to improve our facilities, technology and processes to ensure we deliver an even better travel experience.''
Fuel Hedging
Delta recorded $18 million in net charges for settled fuel hedge contracts for the March 2007 quarter. These charges are reflected in aircraft fuel expense. In addition, in the March 2007 quarter, the company recorded $24 million in gains associated with the ineffective portion of fuel hedges in other expense (income).
Delta Air Lines Reports $155 Million Operating Profit for March 2007 Quarter
Monday April 23, 8:00 am ET
ATLANTA, April 23, 2007 (PRIME NEWSWIRE) -- Delta Air Lines (Other OTC:DALRQ.PK - News) today reported results for the quarter ended March 31, 2007. Key points include: * Delta's operating profit for the March 2007 quarter was $155 million, the company's fourth consecutive quarterly operating profit. * Delta's first quarter net loss was $130 million. Excluding reorganization items, the net loss was $6 million. 1,2 * On April 16, 2007, Delta announced its creditors overwhelmingly support the company's plan of reorganization, with more than 95 percent of ballots cast in favor of the plan. * As of March 31, 2007, Delta had $4.0 billion in cash, cash equivalents and short-term investments, of which $2.9 billion was unrestricted.
Delta reported a net loss of $130 million in the first quarter of 2007, compared to a net loss of $2.1 billion in the first quarter of 2006. Excluding the reorganization and special items described below, the net loss was $6 million in the first quarter of 2007, a $350 million improvement compared to the net loss of $356 million in the first quarter of 2006. For the March 2007 quarter, Delta's operating income was $155 million and its operating margin was 3.7 percent -- an improvement of more than 8 points over the prior year period, excluding special items.
``The past 18 months have been challenging times and Delta people rose to that challenge. As these results show, much more has been done than improving our financial structure. Delta has fundamentally transformed into a thriving industry leader,'' said Gerald Grinstein, Delta's chief executive officer. ``We are stronger -- financially, operationally, and in spirit -- and Delta is ready to return to its traditional leadership position in this highly competitive industry.''
Financial Performance
Strong passenger demand, combined with Delta's network restructuring and revenue management initiatives, drove improvements in the company's revenue performance, with revenue strength seen in all geographic markets.
Delta's total international passenger unit revenue (PRASM) grew 6.4 percent year over year excluding special items, with the Latin and trans-Atlantic markets each seeing greater than 5 percent PRASM improvement on 32 and 22 percent capacity increases, respectively. Domestic markets also showed solid PRASM performance, with domestic PRASM up 6.3 percent excluding special items on 5.4 percent lower capacity. With the change in mix of domestic and international flying, Delta's consolidated PRASM increased 4.5 percent in the March 2007 quarter compared to the same period in 2006, excluding special items.
Delta's length of haul adjusted PRASM increased 6.1 percent for the first quarter 2007 versus first quarter 2006. This increase was 4 points higher than the industry average PRASM (excluding Delta) increase of 2.1% over the same period.
Additionally, Delta continued to generate cost reductions from its restructuring. For the March 2007 quarter, Delta's operating expenses decreased 2.3 percent, or $94 million, despite a 2.0 percent increase in capacity, compared to the March 2006 quarter, excluding special items. For the same period, non-operating expenses decreased 20.3 percent, or $41 million, due to lower interest expense from lower debt levels and mark-to-market gains on fuel hedges. Delta's mainline unit costs in the first quarter of 2007 decreased by 6.3 percent compared to the first quarter of 2006, excluding special items. Excluding fuel(3) and special items, mainline unit costs decreased 8.7 percent over the prior year period.
Delta's March quarter 2006 results included $1.7 billion in non-cash charges for reorganization and special items. Including those items, March 2007 quarter PRASM increased 7.1 percent, operating expenses decreased 5.1 percent (or $215 million), and mainline unit costs decreased 9.8 percent, as compared to the March 2006 quarter.
At March 31, 2007, Delta had $4.0 billion in cash, cash equivalents and short-term investments, of which $2.9 billion was unrestricted. During the March 2007 quarter, Delta generated $461 million in free cash flow, after a $50 million contribution to its defined benefit pension plan and more than $150 million in capital expenditures to reinvest in its business.
``Our financial performance this quarter -- both operating margin improvement and liquidity -- exceeded expectations under our plan,'' said Edward H. Bastian, Delta's executive vice president and chief financial officer. ``As we emerge from bankruptcy, we are well positioned to build on the momentum of our restructuring with best-in-class costs, improving revenue performance, a strong balance sheet, and the premiere workforce in the industry.''
Operational Performance
In the March 2007 quarter, despite severe weather in the Northeast, Delta employees worked together to deliver a DOT on time arrival rate of 78.1 percent and completion factor of 98.0 percent for the quarter. Delta employees earned Shared Reward payments in the quarter in recognition of the strong performance in on time arrival rate and completion factor, as well as customer satisfaction.
``In overcoming the weather challenges this quarter, Delta people stepped to the plate to deliver both industry leading operational performance and the highest level of service to our customers,'' said Jim Whitehurst, Delta's chief operating officer. ``As part of our customer service commitment this year, we will continue to improve our facilities, technology and processes to ensure we deliver an even better travel experience.''
Fuel Hedging
Delta recorded $18 million in net charges for settled fuel hedge contracts for the March 2007 quarter. These charges are reflected in aircraft fuel expense. In addition, in the March 2007 quarter, the company recorded $24 million in gains associated with the ineffective portion of fuel hedges in other expense (income).
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