Delta Air Lines beats by $0.06, reports revs in-line; guides Q4 EPS in-line, rev above consensus
- Reports Q3 (Sep) earnings of $1.80 per share, $0.06 better than the S&P Capital IQ Consensus of $1.74; revenues rose 8.1% year/year to $11.95 bln vs the $11.96 bln S&P Capital IQ Consensus. Adjusted earnings per share were up 16 percent compared to the prior year quarter, driven by revenue momentum, tax reform benefits and a four percent lower share count. Results reflect a $30 million negative impact from Hurricane Florence. Total unit revenues excluding refinery sales (TRASM) increased 4.3 percent during the period driven by strong demand and improving yields. Foreign exchange benefit of ~half a point was offset by the impact of Hurricane Florence.
- Last week, Delta narrowed third quarter EPS to $1.70-1.80 from 1.65-1.85, pre-tax margin to 13% from 12-14% and unit revenue to 4.0-4.5% 3.5-5.5%
- Co issues in-line guidance for Q4, sees EPS of $1.10-1.30 vs. $1.25 S&P Capital IQ Consensus; rev +8% to $11.06 bln vs. $10.7 bln consensus, unit rev +3-5%, pre-tax margin 9-11%.
- No cancellations out of Atlanta yesterday or today due to Hurricane Michael; Florida panhandle is restarting service today
- Was able to offset 85% of fuel cost increase in Q3
- Haven't seen any demand slowdown
- Higher rates will help pension liabilities.
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