Rising fares push Delta past profit estimates

Cornelia Mascio
Luglio 12, 2018

Delta Air Lines Inc (DAL.N) topped estimates for quarterly profit and operating revenue Thursday as a rise in average fares trumped an nearly 40 percent surge in fuel costs, pushing shares higher. Delta said its fuel bill in 2018 would be $2 billion higher than a year ago.

Given the additional fuel costs, however, the airline also said that it planned to cut less profitable flights in its new schedule for the second half of this year.

Travel demand has remained robust, with global air passenger traffic growing every month this year through May as economic growth improves and customers benefit from tax cuts.

For the second quarter, Delta reported an adjusted operating revenue of $11.6 billion - an increase of 8 percent, or $880 million, over previous year.

On an adjusted basis, the airline earned $1.77 per share, beating estimate of $1.72, according to Thomson Reuters I/B/E/S.

"While we are pleased with our revenue performance in the quarter, accelerating the recapture of the recent fuel price increases is the number one focus for our commercial team", said Delta President Glen Hauenstein.

The company's board approved a 15 percent hike in dividend for the third quarter to 35 cents. Shares rose 1.9% premarket, but are down 11.0% in 2018 through Wednesday, while the S&P 500 has gained 3.8%.

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