Delta forecasts quarterly earnings ahead of expectations, focuses on efficiency as growth steadies

Delta
Air
Lines
swung
to
a
profit
in
the
first
quarter,
and
CEO
Ed
Bastian
said
bookings
for
both
leisure
and
business
travel
are
strong
as
the
peak
travel
season
approaches,
despite

persistent
inflation.

“Consumers
continue
to
prioritize
travel
as
a
discretionary
investment
in
themselves,”
Bastian
said
in
an
interview.

Delta
forecast
second-quarter
earnings
of
$2.20
to
$2.50
per
share,
while
analysts
forecast
between
$2.23
per
share
on
average,
according
to
LSEG,
formerly
known
as
Refinitiv.
It
said
revenue
in
the
current
period
could
rise
as
much
as
7%,
ahead
of
analysts’
estimates.
Delta
also
reiterated
its
full-year
forecast
for
$6
to
$7
a
share
and
free
cash
flow
of
between
$3
billion
and
$4
billion.

Business
travel
improved
in
the
last
quarter
and
solid
demand
is
likely
to
continue,
executives
said,
citing
14%
growth
in
corporate
travel
sales.
They
called
out
the
technology,
consumer
and
financial
services
sectors
as
particularly
strong.

Delta
has
slowed
hiring,
like
other
carriers,
after
a
massive
spree
in
the
wake
of
the
pandemic,
and
is

focusing
more
on
efficiency.
Bastian
told
CNBC
that
the
company’s
headcount
will
likely
be
up
low
single
digits
this
year
compared
with
2023.

Here’s
how
the
company

performed
in
the
three
months
ended
March
31, compared
with
Wall
Street
expectations
based
on
consensus
estimates
from
LSEG:

• 
  Adjusted
  earnings
  per
  share: 45
  cents
  vs.
  36
  cents
  expected.
• 
  Adjusted
  revenue: $12.56
  billion
  vs.
  $12.59
  billion
  expected.

The
carrier
made
$37
million,
or
6
cents
per
share,
in
the
first
three
months
of
the
year,
up
from
a
loss
of
$363
million,
or
57
cents
per
share,
in
the
year-earlier
period,
it
said
Wednesday.
Delta’s
adjusted
earnings
of
$288
million,
or
45
cents
a
share,
rose
from
$163
million,
or
25
cents
a
share
in
the
first
quarter
of
2023.

Revenue
of
$12.56
billion,
adjusted
to
strip
out
refinery
sales,
was
up
6%
from
last
year,
and
slightly
below
analysts’
expectations.

Delta’s
unit
cost,
when
stripping
out
fuel,
rose
1.5%
on
the
year.
Delta
said
domestic
unit
revenue
rose
3%
from
a
year
ago
with
airplane
loads
at
records
for
the
quarter,
traditionally
a
slow
period
for
travel.
Airfare
rose
1%
from
February
to
March,
but
was
down
7%
last
month
compared
with
the
same
month
last
year,
according
to
Wednesday’s
U.S.
inflation
report.

“Growth
is
normalizing
and
we
are
in
a
period
of
optimization,
with
a
focus
on
restoring
our
most
profitable
core
hubs
and
delivering
efficiency
gains,”
CFO
Dan
Janki
said
in
an
earnings
release.