Categories AlphaGraphs, Consumer, Earnings
Delta Air Lines stock falls on weak guidance; Q4 earnings beat estimates
Aviation firm Delta Air Lines (DAL) reported stronger than expected earnings for the fourth quarter when strong top-line performance more than offset the impact of higher fuel costs. However, the company’s stock dropped in the pre-market Tuesday after its guidance missed expectations.
Net income climbed to $1.02 billion or $1.49 per share in the fourth quarter from $0.30 billion or $0.42 per share in the same period last year. On an adjusted basis, earnings rose to $1.30 per share from $0.92 per share in the year-ago quarter and surpassed Wall Street estimates. The bottom-line growth was restricted by a 27% increase in adjusted fuel expenses, which pushed up total operating expenses.
The bottom-line growth was restricted by a 27% increase in adjusted fuel expenses, which pushed up total operating expenses
Operating revenue, on an adjusted basis, advanced 5% annually to $10.74 billion during the three-month period. Passenger revenue, which accounts for the lion’s share of total revenues, moved up 7% and cargo revenues rose 5%. Passenger revenue per available seat mile advanced 2.7% annually, while adjusted total revenue per available seat mile rose by 3.2%.
“As we move into 2019, we expect to drive double-digit earnings growth through higher revenues, maintaining a cost trajectory below inflation, and the modest benefit from lower fuel costs. Margin expansion is a business imperative and we remain confident in our full-year earnings guidance of $6 to $7 per share,” said Delta CEO Ed Bastian.
Also see: Delta Air Lines Q4 2018 Earnings Conference Call Transcript
The management is currently looking for earnings in the range of $0.70 per share to $0.90 per share for the first quarter of 2019 when pre-tax margin is anticipated to be between 6.5% and 8.5%. However, the expected performance falls short of analysts’ prediction. Adjusted revenue per available seat miles is estimated to be flat to up 2%. Cost per available seat mile, on an adjusted basis, is seen rising by 1-2% and system capacity by about 4%.
During the quarter, the company returned $563 million to shareholders, which included $325 million of share repurchases and $238 million in dividends.
Delta’s shares closed the last trading session lower and lost further in early trading Tuesday. The stock has been on a downtrend for the last twelve months.
We’re on Flipboard! Follow us to receive the latest stock market, earnings, and financial news at your fingertips
Most Popular
STZ Earnings Preview: Can Constellation Brands leverage growing beer sales?
Constellation Brands, Inc. (NYSE: STZ) has effectively navigated challenges like cautious consumer spending and declining demand for its wine and spirits brands by capitalizing on the sustained growth in the
What to look for when Lamb Weston (LW) reports its Q3 2025 earnings results
Shares of Lamb Weston Holdings, Inc. (NYSE: LW) stayed green on Friday. The stock has dropped 19% over the past three months. The French fry giant is slated to report
Walgreens Boots Alliance set to report Q2 earnings. Here’s what to expect
Walgreens Boots Alliance, Inc. (NASDAQ: WBA), a market leader in health and wellness services, is preparing to report second-quarter results, with market watchers forecasting a mixed outcome. As part of
Comments