Delta Air Lines reported September-quarter earnings below Bloomberg estimates and lowered its full-year profit outlook as higher fuel costs weighed on margins, sending shares down about 5% in premarket trading on Friday. Adjusted earnings were $1.72 a share, below the $1.82 Bloomberg consensus estimate, while adjusted revenue rose 16% to $17.59 billion, slightly missing the $17.66 billion estimate. Adjusted operating income fell 2% to $1.66 billion and the operating margin narrowed to 9.4% from 11.1% a year earlier, as adjusted fuel expense surged 62% to $4.14 billion and non-fuel unit costs rose 7.3%. Chief Executive Officer Ed Bastian said demand remains strong and noted September-quarter pre-tax profit of $1.5 billion matched the year-earlier performance despite the elevated fuel-cost environment. For the December quarter, Delta expects adjusted earnings per share of about $1.4 at the midpoint, below the $1.48 consensus estimate, on revenue growth of about 20% with seats growing less than 2%; Chief Financial Officer Erik Snell said the outlook assumes fuel prices of about $4.25 a gallon. Delta forecasts full-year adjusted earnings of about $5.35 per share at the midpoint, compared with Bloomberg's $5.44 estimate, and free cash flow of about $2.5 billion, with Bastian saying the company expects to absorb a $6 billion increase in fuel costs for the full year.
Delta Air Lines IncDelta reported Q3 earnings below estimates and cut its full-year profit outlook as higher fuel costs squeezed margins.
