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.

Delta Air Lines fourth quarter 2018 earnings infographic
Delta Air Lines Q4 2018 Earnings Infographic

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

Key highlights from Autodesk (ADSK) Q4 2021 earnings results

Autodesk, Inc. (NASDAQ: ADSK) today reported its fourth quarter financial results for the period ended January 31, 2021. Net income for the fourth quarter was $911.3 million, or $4.10 per

Infographic: Beyond Meat (BYND) reports wider Q4 loss; Revenue up 4%

Beyond Meat (NASDAQ: BYND), a specialist in plant-based meat substitutes, Thursday reported a wider loss for the fourth quarter, despite an increase in revenues. The numbers also missed the consensus

Virgin Galactic stock tanks on delayed test flight

Virgin Galactic (NYSE: SPCE) reported fourth-quarter 2020 financial results after the regular market hours on Thursday. The space tourism company reported zero revenue in the fourth quarter, compared to $529,000

Add Comment
Viewing Highlight