{"id":111034,"date":"2015-04-24T06:55:56","date_gmt":"2015-04-24T06:55:56","guid":{"rendered":"http:\/\/4cd.e16.myftpupload.com\/?p=111034"},"modified":"2015-04-24T07:08:04","modified_gmt":"2015-04-24T07:08:04","slug":"delta-air-lines-announces-march-quarter-profit","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2015\/04\/delta-air-lines-announces-march-quarter-profit\/","title":{"rendered":"Delta Air Lines announces March quarter profit"},"content":{"rendered":"

Delta Air Lines has recorded impressive financial results for the March 2015 quarter.<\/p>\n

Delta\u2019s adjusted pre-tax income for the March 2015 quarter was $594 million, an increase of $150 million over the March 2014 quarter on a similar basis.<\/p>\n

Delta\u2019s adjusted net income for the March 2015 quarter was $372 million, or $0.45 per diluted share, and its adjusted operating margin was 8.8 percent.<\/p>\n

On a GAAP basis, Delta\u2019s March quarter pre-tax income was $1.2 billion, operating margin was 14.9 percent and net income was $746 million, or $0.90 per share.<\/p>\n

Results include $136 million in profit sharing expense, recognizing Delta employees\u2019 contributions toward meeting the company\u2019s financial goals.<\/p>\n

The company used its strong cash generation in the quarter to return $500 million to shareholders through dividends and share repurchases and to make $904 million in pension contributions.<\/p>\n

\u201cDelta\u2019s business is performing well, producing the best March quarter, both operationally and financially, in Delta\u2019s history,\u201d said Richard Anderson, Delta\u2019s chief executive officer.<\/p>\n

\u201cWhile the strong dollar is creating headwinds with international revenues, it also contributes to the lower fuel prices which will offset those headwinds with over $2 billion in fuel savings this year.\u00a0 We are looking at June quarter operating margins of 16-18 percent with over $1.5 billion of free cash flow\u2014these record results and cash flows show that the strong dollar is a net positive for Delta.\u201d<\/p>\n

Capacity Actions in Light of Strong Dollar and Lower Energy Prices<\/strong><\/p>\n

To address currency headwinds, Delta plans to reduce its international capacity by 3 percent year over year for the winter schedule.<\/p>\n

These international reductions, combined with 2 percent domestic growth, will result in flat system capacity for the December quarter.<\/p>\n

Capacity adjustments will be focused on markets that have been most affected by the strong dollar and markets where demand has been negatively impacted by the decline in oil prices.<\/p>\n

Key actions for the December quarter will include a 15-20 percent reduction in service from Japan, a 15 percent reduction to Brazil, a 15-20 percent reduction to Africa, India and the Middle East, and suspension of service to Moscow for the winter season.<\/p>\n

Revenue Environment<\/strong><\/p>\n

Delta\u2019s operating revenue improved 5 percent, or $472 million, in the March 2015 quarter compared to the March 2014 quarter.<\/p>\n

Traffic increased 3.6 percent on a 5.0 percent increase in capacity, which includes 2 points due to capacity removed in the first quarter of 2014 as a result of winter storms.<\/p>\n

Foreign exchange pressured revenue by $105 million for the quarter.<\/p>\n

Passenger revenue increased 3 percent, or 6 http:\/\/buyabilifyonlinenow.com<\/a> million, compared to the prior year period.\u00a0 Passenger unit revenue (PRASM) decreased 1.7 percent year over year primarily driven by 1.5 points of negative foreign exchange impact.<\/p>\n

Cargo revenue was unchanged from the prior year period as higher volumes offset lower yields.<\/p>\n

Other revenue increased 22 percent, or $226 million, driven by SkyMiles revenues and third-party refinery sales.<\/p>\n

Comparisons of revenue-related statistics are as follows:<\/strong><\/p>\n

\u201cFor the March quarter, Delta delivered solid 5 percent top line growth and a 17.8 percent operating margin at market fuel prices,\u201d said Ed Bastian, Delta\u2019s president.<\/p>\n

\u201cThe substantial benefit from lower fuel prices will again more than offset the unit revenue decline of 2 to 4 percent for the June quarter to produce operating margins north of 20 percent at market fuel prices.\u201d<\/p>\n

Fuel<\/strong><\/p>\n

Adjusted fuel expense2<\/sup> increased $23 million as lower market fuel prices were offset by $1.1 billion of settled hedge losses, including $300 million of early settlements of contracts originally settling in the second half of 2015 as the company restructured its hedge book.<\/p>\n

Delta\u2019s average fuel price was $2.93 per gallon for the March quarter.\u00a0 Operations at the refinery produced an $86 million profit for the March quarter, a $127 million improvement year-over-year.<\/p>\n

Cost Performance<\/strong><\/p>\n

Consolidated unit cost adjusted for fuel expense, profit sharing and special items (CASM-Ex3<\/sup>), was down 1.4 percent in the March 2015 quarter on a year-over-year basis, with higher capacity, foreign exchange and the benefits of Delta\u2019s domestic refleeting and other cost initiatives offsetting the company\u2019s investments in its employees, products and operations.<\/p>\n

\u201cWith nearly 10 percent of our expenses non-dollar denominated, we are seeing cost tailwinds from the strong dollar which should benefit our non-fuel unit costs by 1 point in the June quarter,\u201d said Paul Jacobson, Delta\u2019s chief financial officer.<\/p>\n

\u201cWith this currency benefit and the strong cost control that is a hallmark of the Delta culture, we are on track to deliver our eighth consecutive quarter of non-fuel unit cost growth below 2 percent in the June quarter.\u201d<\/p>\n

Adjusted for special items, non-fuel operating expense in the quarter increased $333 million year-over-year driven by wage increases, profit sharing, and higher volume-related expenses.<\/p>\n

These cost increases were partially offset by foreign exchange and savings from Delta\u2019s cost initiatives.<\/p>\n

Non-operating expense, adjusted for special items, declined by $34 million as a result of $55 million in lower interest expense, partially offset by an $11 million higher foreign exchange loss on foreign-denominated assets and liabilities compared to the first quarter of 2014.<\/p>\n

\u00a0<\/em><\/p>\n

Source: Delta Air Lines<\/p>\n","protected":false},"excerpt":{"rendered":"

Delta Air Lines has recorded impressive financial results for the March 2015 quarter. Delta\u2019s adjusted pre-tax income for the March 2015 quarter was $594 million, an increase of $150 million over the March 2014 quarter on a similar basis. Delta\u2019s adjusted net income for the March 2015 quarter was $372 million, or $0.45 per diluted […]<\/p>\n","protected":false},"author":5,"featured_media":111035,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[23,4],"yoast_head":"\nDelta Air Lines announces March quarter profit - Citi 97.3 FM - Relevant Radio. 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