Shares of Delta Air Lines rose today after the company reported adjusted revenue of $14.61 billion versus the $14.49 billion expected by analysts.
Delta Air Lines Inc (NYSE:DAL), one of the oldest operating airlines in operation, reported its highest quarterly profit in the June quarter and provided its outlook for the September quarter of 2023. As a result, the company posted strong operating cash flow for the June quarter. , which will ostensibly enable the airline to reduce its debt. For the quarter, Delta reported adjusted revenue of about $14.61 billion versus the $14.49 billion expected by analysts surveyed by Refinitiv.
Therefore, the airline posted adjusted earnings per share of about $2.68 versus the $2.40 that Wall Street analysts in a Refinitiv survey had forecast.
The company highlighted that consumer demand for air travel remains high especially after all global markets reopened from Covid-19 carry-on restrictions. Moreover, the company’s revenue for the June quarter was 19 percent higher than the same period last year.
According to the announcement, the June quarter recorded operating income of approximately $2.5 billion, with an operating margin of approximately 17.1 percent. With operating cash flow of approximately $2.6 billion and free cash flow of approximately $1.1 billion, Delta Airlines reported adjusted net debt of $19.8 billion at the end of the June quarter.
Ed Bastian, CEO of Delta Air Lines, stressed that the growing demand for consumer air travel will continue in the coming years. Reportedly, transatlantic air travel jumped more than 60 percent from last year, compared to an 8 percent increase in domestic revenue and a 21 percent increase in passenger revenue overall.
Delta Air Lines Marker Forecast
After posting a profitable quarter, the company raised its 2023 earnings guidance to $6-$7 per share, and reiterated its recently updated forecast for free cash flow of $3 billion. For the third quarter, the company expects to earn $2.20 to $2.50 per share, beating analyst expectations, with a capacity increase of 16 percent.
“If you asked any quarter where capacity grew in high double digits and we held our overall pricing, that would be great,” Bastian He said.
After the quarterly earnings were announced, Delta shares rose nearly 2.5 percent on Thursday before pulling back. However, shares of DAL are up nearly 43% in the past three months to trade around $47.60. The $30.82 billion company convinced investors with its lucrative future prospects. According to a survey by MarketWatch, 21 analysts gave DAL stock an average Buy rating with a $59 target.
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