Delta Air Lines Reports Adj. Profit In Q4; Projects Loss In Q1

Delta Air Lines (DAL) said the company ended December with revenues nearly 80 percent recovered to 2019 levels on strong demand and pricing during the holiday period. Fourth quarter adjusted operating revenue was 74 percent recovered compared to December quarter 2019 on capacity that was 79 percent restored, the company said.

Looking forward, Delta Air Lines anticipates recent rise in COVID cases associated with the omicron variant to impact the pace of demand recovery early in the first quarter. Factoring this, the company projects total March quarter revenue to recover to 72 to 76% of 2019 levels, compared to 74% in the December quarter. Despite expectations for a loss in the March quarter, the company expects to generate a healthy profit in the June, September and December quarters, resulting in a meaningful profit in 2022.

Delta Air Lines reported adjusted pre-tax income of $170 million for the December quarter. Adjusted profit per share was $0.22, for the quarter. On average, 17 analysts polled by Thomson Reuters expected the company to report profit per share of $0.14, for the quarter. Analysts’ estimates typically exclude special items.

Fourth quarter net loss was $408 million or $0.64 per share compared to net income of $1.10 billion or $1.71 per share, two years ago.

Fourth quarter total operating revenue was $9.47 billion, down 17% from fourth quarter of 2019. Adjusted operating revenue, which excludes third-party refinery sales, were $8.4 billion, for the quarter. Analysts on average had estimated $9.21 billion in revenue.

Dan Janki, Delta’s CFO stated: “With omicron impacting our near-term outlook, we expect losses in January and February months with a return to profitability in the month of March.”

At the end of the December quarter, the company had $14.2 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities. At the end of the December quarter 2021, the company had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion.

Ed Bastian, Delta’s CEO, said: “As always, our people drove this success, which is why we were happy to announce this morning a special profit-sharing payment for all eligible employees.”

Shares of Delta Air Lines were up 2% in pre-market trade on Thursday.

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