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Delta Airlines It posted its highest ever quarterly revenue and profit thanks to strong travel demand that defied fears of an economic slowdown for months.
International travel and demand for premium seats like first class were highlights during the second quarter, while a 22% decline in Delta fuel costs boosted the carrier’s bottom line.
The Atlanta-based airline on Thursday raised its 2023 earnings forecast to $6 to $7 per share, up from its estimate last month at the high end of the $5 to $6 per share range. Delta stock rose more than 4% in pre-market trading after the results.
CEO Ed Bastian said he expects consumers’ desire to travel to drive bookings for years, describing the current period as “the mid-period of travel growth.”
“I think the trends we’ve seen this year will continue,” he said in an interview.
Bastien said international demand remains strong through the fall and he expects a slow but steady increase in corporate travel bookings.
Delta is the first US airline to publish second-quarter results, and its report sets an optimistic tone for the rest of the year. United Airlines And American Airlines A report is due next week.
In the third quarter, Delta expects to earn $2.20 to $2.50 per share, above analyst expectations, with a capacity increase of 16%. The carrier expects a jump in revenue of up to 14% over the previous year.
Here’s how Delta performed in the quarter ended June 30 compared to Wall Street expectations based on Refinitiv consensus estimates:
- Adjusted earnings per share: 2.68 cents versus the expected $2.40.
- Adjusted revenue: 14.61 billion dollars, compared to the expected 14.49 billion dollars.
Transatlantic travel was particularly strong in the spring and early summer, with revenue from those flights up more than 60% from a year ago, compared to an 8% increase in domestic revenue and a 21% increase in passenger revenue overall. Delta and its rivals have boosted access to Europe this year in anticipation of a resurgence. (Bastien told CNBC he recently traveled to the south of France.)
Premium ticket revenue growth also outpaced that of the main economy compartment.
Unit revenue, a measure of how much airlines make for each seat they fly 1 mile, was up 1% year-over-year, 17% capacity increase.
“If you asked any quarter where we grew capacity in high double digits and held our overall pricing, that would be pretty amazing,” Bastian said.
Delta’s net income for the quarter was $1.83 billion, or $2.84 per share, up from $735 million, or $1.15 per share, a year ago. When adjusting for some items, earnings per share were $2.68, up from $1.44 in the same period last year.
The company’s net income was the highest since the last quarter of 2013, when the company returned more than $8 billion in tax loss credits to its balance sheet.
Delta brought in $14.61 billion in revenue, adjusted for divesting sales from its refineries, in the three months ended June 30, up 19% from a year ago, and above analyst estimates. Total revenue of $15.58 billion was up 13% from the previous year.
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