Delta Earnings Slip to $1.18 Billion
11 October 2017 - 10:45PM
Dow Jones News
By Doug Cameron
Delta Air Lines Inc. on Wednesday said the revenue environment
was improving as it reported a dip in quarterly profit after
hurricanes disrupted its network.
The Atlanta-based airline opened the reporting season for what
is traditionally the industry's busiest and most profitable
quarter, but one that this year has been hit by multiple weather
disruptions and an outbreak of fare wars that are expected to
depress earnings.
Delta said profits dipped to $1.18 billion in the quarter to
Sept. 30 from $1.26 billion a year earlier but forecast its keenly
watched average passenger revenue would rise by 2% to 4% in the
fourth quarter. Earnings per share slipped to $1.64 from $1.69, but
the $1.57 adjusted figure was ahead of the $1.54 consensus among
analysts polled by Thomson Reuters.
U.S. airline shares fell sharply during the summer as efforts to
boost fares and profits faltered because of intensifying
competition on some of the busiest domestic routes from ultra
low-cost carriers such as Spirit Airlines Inc.
Delta's average passenger revenue climbed 3.6% in the quarter
compared with a year earlier, continuing a positive trajectory that
is expected to continue through the end of the year.
American and United Continental Holdings Inc. this week raised
their own guidance for average passenger revenue for the third
quarter, sparking a rally in airline stocks.
While investors' focus has been on airlines' revenue outlook,
Delta executives are also expected to be questioned on a coming
analyst call about any potential fallout from the brewing trade
spat between the U.S. and Canada triggered by Delta's order for 75
CSeries jets from Bombardier Inc.
U.S. trade officials have outlined plans for tariffs that would
potentially quadruple the price of the planes after upholding a
complaint from Boeing Co. that Bombardier benefited from unfair
government subsidies.
Delta, which is due to take the first of the planes next spring,
has called for the case to be dropped, arguing that Boeing wasn't
harmed as it didn't offer a competing jet.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
October 11, 2017 07:30 ET (11:30 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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