Investors Cheer as Delta (DAL) Beats Q4 Views; Shares Moving Higher
Delta (NYSE: DAL) is leading the Airline sector higher Wednesday morning as investors may be getting more optimistic following strong fourth-quarter results.
Delta reported an 8 percent rise in quarterly sales from $7.789 billion in the year-ago quarter to $8.399 billion. A consensus of analyst estimates was at $8.31 billion. Mainline sales were up 8 percent to $5.666 billion, while sales to the company's Regional carriers rose 9 percent to $1.557 billion.
GAAP earnings per share were up sharply from 2 cents in the same quarter of 2010 to 50 cents. Earnings on an adjusted basis totaled 45 cents per share, 7 cents better than the Street estimate of 38 cents.
"With the December quarter's strong revenue performance, Delta produced a revenue premium to the industry and fully covered our fuel cost increase with higher revenues," said Ed Bastian, Delta's president. "Our revenue momentum has continued into 2012, and we are currently seeing our January consolidated passenger unit revenues up 15% year over year."
CEO Richard Anderson said, "Looking forward to 2012, we will continue our commitment to sustained profitability and superior returns by growing and diversifying our revenues, while taking a disciplined approach to capacity, costs and capital spending."
Excluding mark to market adjustments, Delta's average fuel price was $2.97 per gallon for the December quarter, which includes 17 cents per gallon in settled gains from its fuel hedging program.
At the end of 2011, Delta had $5.4 billion in unrestricted liquidity, including $3.6 billion in cash and short-term investments and $1.8 billion in undrawn revolving credit facilities.
The company is modeling for an operating margin of 2 percent to 4 percent for the first quarter, with CapEx around $450 million. Delta sees Domestic capacity down 2-4 percent and International capacity down 4-6 percent during the quarter.
Shares of Delta last traded at $9.85, up 5 percent from Tuesday's closing price.
Delta reported an 8 percent rise in quarterly sales from $7.789 billion in the year-ago quarter to $8.399 billion. A consensus of analyst estimates was at $8.31 billion. Mainline sales were up 8 percent to $5.666 billion, while sales to the company's Regional carriers rose 9 percent to $1.557 billion.
GAAP earnings per share were up sharply from 2 cents in the same quarter of 2010 to 50 cents. Earnings on an adjusted basis totaled 45 cents per share, 7 cents better than the Street estimate of 38 cents.
"With the December quarter's strong revenue performance, Delta produced a revenue premium to the industry and fully covered our fuel cost increase with higher revenues," said Ed Bastian, Delta's president. "Our revenue momentum has continued into 2012, and we are currently seeing our January consolidated passenger unit revenues up 15% year over year."
CEO Richard Anderson said, "Looking forward to 2012, we will continue our commitment to sustained profitability and superior returns by growing and diversifying our revenues, while taking a disciplined approach to capacity, costs and capital spending."
Excluding mark to market adjustments, Delta's average fuel price was $2.97 per gallon for the December quarter, which includes 17 cents per gallon in settled gains from its fuel hedging program.
At the end of 2011, Delta had $5.4 billion in unrestricted liquidity, including $3.6 billion in cash and short-term investments and $1.8 billion in undrawn revolving credit facilities.
The company is modeling for an operating margin of 2 percent to 4 percent for the first quarter, with CapEx around $450 million. Delta sees Domestic capacity down 2-4 percent and International capacity down 4-6 percent during the quarter.
Shares of Delta last traded at $9.85, up 5 percent from Tuesday's closing price.