Delta Air Lines (NYSE:DAL) has reported fourth-quarter revenue and earnings that beat expectations as demand for air travel continued to recover from Covid travel restrictions.
However, the airline’s guidance for the first quarter of its 2023 financial year proved disappointing, sending its shares lower in late morning trade in New York.
The airline delivered adjusted operating revenue of $12.3 billion for the three months to December 31, 2022, 8% higher than a year earlier. Adjusted earnings per share of $1.48 beat Wall Street consensus of $1.33 according to Refinitiv.
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Full-year 2022 operating revenue of $45.6 billion was $19 billion up on 2021 and came in 2% below 2019 levels as travel recovered to pre-Covid levels. Adjusted earnings per share (EPS) of $3.20 topped recent guidance from the airline.
It is guiding investors for a 14% to 17% increase in 1Q 2023 sales from the same quarter in 2019 on capacity that is 1% lower and for full-year 2023 sales to be as much as 20% higher than 2019 levels. It expects 1Q EPS of $0.15 to $0.40, below Wall Street estimates.
The airline said it expected non-fuel unit costs to increase 3% to 4% for the March quarter, including a full quarter impact from labor cost increases and finalizing the rebuilding of its network for the peak summer period.
"As we move into 2023, the industry backdrop for air travel remains favorable and Delta is well positioned to deliver significant earnings and free cash flow growth,” Delta CEO Ed Bastian said in a statement. “We expect to grow 2023 revenue by 15 to 20% and improve unit costs year-over-year, supporting a full-year outlook for earnings of $5 to $6 per share and keeping us on track to achieve more than $7 of earnings per share in 2024."
Delta’s shares traded 3.9% lower at $37.90 by 11:30am in New York.
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