Delta Air Lines, Inc. (DAL) is the one of the largest U.S. airline and provides scheduled air transportation for passengers and cargo across the globe. The Atlanta, GA based company’s route network is centered on the hub system that it operates at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York – John F. Kennedy International Airport (JFK), Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-Narita.
Delta like many of its peers in the airline industry is benefiting considerably from persistent weak oil prices. Fuel costs account for a major chunk of an airline's operating expenses. Consequently, cheaper oil price should boost Delta’s results. Due to this, investors are eagerly awaiting Delta’s earnings report in order to see how the airline behemoth benefits from the favorable conditions surrounding the industry.
Delta has delivered positive earnings surprises in each of the last four quarters, with an average beat of 4.91%. Delta has witnessed upward revisions in earnings estimates driven by weak oil prices. The Zacks Consensus Estimate for fourth-quarter earnings has moved north by 11.9% over the last 90 days.
Zacks Rank
Currently, Delta has a Zacks Rank #1 (Strong Buy). We have highlighted some of the key stats from this just-revealed announcement below
Earnings
Delta beat on earnings. The company reported earnings of $0.78 per share which was above of the Zacks Consensus Estimate of $0.75 per share. Investors should note that these figures take out stock option expenses.
Revenue
Delta reported revenues of $9.65 billion, up 6% from the year-ago quarter. Revenues were ahead of the Zacks Consensus Estimate of $9.59 billion.
Guidance
For the first quarter of 2015, the carrier expects operating margin in the range of 11% to 13% and consolidated unit cost, excluding fuel and profit sharing, to increase 0%–2% year over year in the first quarter.
The estimated fuel price, including taxes and hedges, is approximately $2.45 to $2.50 per gallon. System capacity is expected to increase approximately 3% (excluding the impact of winter storms).
Stock Price
Investors were clearly pleased by the earnings beat with shares up 2.97% at the time of writing.
Check back later for our full write up on this Delta earnings report later!
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