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Delta Air Lines (DAL) Beats on Q2 Earnings

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Delta Air Lines, Inc. (DAL - Free Report) reported second-quarter 2018 earnings per share (excluding 30 cents from non-recurring items) of $1.77, beating the Zacks Consensus Estimate of $1.72. Earnings also increased on a year-over-year basis.

How Was the Estimate Revision Trend?

Investors should note that the earnings estimate revisions for Delta depicted a gloomy picture prior to the earnings release. The stock had seen the Zacks Consensus Estimate for second-quarter earnings being revised 1.1% downward over the last 30 days.

The company however has an impressive earnings history having outperformed the Zacks Consensus Estimate three of the last four quarters with an average beat of 2.8%.

Delta Air Lines, Inc. Price and EPS Surprise


Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote


Revenues Better Than Expected

Delta recorded operating revenues of $11,775 million, which beat the Zacks Consensus Estimate of $11,678.8 million. Also, it compared favorably with the year-ago number.

Key Stats to Note: The airline behemoth witnessed a 4.4% rise in consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenue) in the quarter.

For the third quarter of 2018, the carrier expects earnings per share between $1.65 and $1.85. The carrier anticipates pre-tax margin in the range of 12% to 14% in the quarter. The estimated fuel price, including taxes and refinery impact, is expected in the range of $2.32 to $2.37 per gallon for the third quarter. Total unit revenue, excluding refinery sales, is anticipated to increase in the 3.5-5.5% range in the third quarter. System capacity is expected to be up approximately 3-4% on a year over year basis. Cost per Available Seat Mile, excluding fuel and profit sharing, is expected to be approximately flat in the third quarter.

For the full year, the carrier expects earnings per share in the range of $5.35 - $5.70. Fuel price, including taxes and refinery impact is anticipated to lie between $2.20 and $2.30, while Cost per Available Seat Mile, excluding fuel and profit sharing, is estimated to increase 1-2% year over year in 2018. Meanwhile capacity is projected to expand approximately 3% year over year.

The company’s board approved a 15% hike in dividend to 35 cents per share, payable to shareholders on Aug 16, of record as of Jul 26.

Zacks Rank: Currently, Delta Air Lines has a Zacks Rank #3 (Hold) but that could change following the company’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

Stock Price: The earnings and revenues beat pleased the investors. Consequently shares of the company were up in pre-market trading at the time of writing.

Check back later for our full write up on this Delta Air Lines earnings report later!

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