Delta Air Lines (NYSE:DAL) Inc's first-quarter earnings missed Wall Street estimates but investors looked past that as the company forecast higher-than-expected profit for the second quarter, citing “record” bookings for summer travel.
The Atlanta-based airline said it expects 2Q earnings of $2 to $2.25 per share and continues to expect 2023 earnings of $5 to $6 per share. The current consensus estimate is earnings of $1.38 per share for the quarter ending June 30, 2023, and earnings of $5.20 per share for the year ending December 31, 2023.
"With solid March quarter profitability and a strong outlook for the June quarter, we are confident in our full-year guidance for revenue growth of 15 to 20% year-over-year, earnings of $5 to $6 per share and free cash flow of over $2 billion," Delta CEO Ed Bastian said in a statement.
Investors reacted to the news, sending Delta shares up 2.3% to $34.53 in pre-market trade.
For the 1Q ended March 31, the US carrier reported earnings of $0.25 per share on revenue which grew 36.5% on a year-over-year basis to $12.8 billion. The consensus earnings estimate was $0.29 per share on revenue of $12.8 billion.
"Record March quarter free cash flow of $1.9 billion enabled $1.2 billion of debt repayment and positions us to complete our full year planned debt reduction in the first half of the year," Delta CFO Dan Janki said in a statement.
"We are on track to reduce leverage to 3x to 3.5x in 2023 and remain committed to returning to investment grade metrics by next year. The recent upgrades on our debt rating outlooks by S&P and Fitch recognize our continued progress on delivering our balance sheet."
Delta operates significant hubs and key markets in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Seattle, Seoul-Incheon and Tokyo.
The carrier flies over 4,000 daily flights to more than 275 destinations on six continents.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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