Delta Airlines (NYSE:DAL) reported second-quarter results exceeded expectations thanks to lower fuel costs.
The airline reported net profits of US$1.485 billion, 85% higher than the same quarter last year while revenue rose 0.8% to US$10.71 billion, while analysts expected US$10.64 billion.
Adjusted earnings per share were US$1.27, higher than the US$1.21 expected by analysts.
"Our substantial fuel savings over the coming quarter should allow us to register a new quarterly record with earnings per share of over 30%, a 19 to 21% higher operating margin and a flux liquidity of $ 1.9 billion, "said Delta’s CEO Richard Anderson in a statement.
Delta also said it had been able to give shareholders a billion dollars in dividends and share buybacks.
Following the announcement of these results, shares rose 0.68% to 43.84 dollars on Wall Street.
Some clouds loomed over the good news, however, as the US Justice Dept. has launched an investigation into whether airlines are colluding to keep fare prices high by reducing or limiting the number of flights as demand increases, “signaling those moves to each other in advance”.
But, Delta hinted that yield is dropping, as fares dropped allowing passengers to save four cents per mile in the second quarter compared to the same period a year ago. Delta expects the downward trend to continue in the third quarter and that ut would try to avert this course by reducing the number of flights late-2014 levels.