Delta Q2 2014 Conference Call Highlights - Delta Air Lines (NYSE:DAL)

Delta Air Lines, Inc.

DAL

reported its Q2 2014 conference call Wednesday after the market open, releasing details of sales and some guidance. Before the conference call, Delta released earnings with an EPS of $1.04 versus analyst estimates of $1.03, beating by $0.01. EPS were Up 6 percent from the same quarter last year. Revenue came in short of expectations, Delta reported $10.60 billion compared to consensus $10.64 billion.

Highlights From The Call:

Delta announced 9 percent of top line growth for the quarter and 1.4 billion pre tax profit.
Passenger revenue increased by $772 million (9 percent) for the quarter.
$100 million in buy back in shares, Delta repurchased 12.4 million shares in the quarter.
4 points margins expansion, $1.5 billion free cash flow
11 percent improvement in baggage performance.
Delta's management was proud to announce the airliner currently obtains the lowest capital cost per aircraft in the sector. Ex fuel gasens was flat for the quarter.
Delta JD reported 30 percent capacity rate.
Non-fuel cost 3 percent annually, previous goal given. Non-fuel cost decreased by 2 percent for each of the last four quarters.
Fuel expense declined by $168 million due to crude hedge benefits. Delta's average fuel price was $2.93 per gallon for the June quarter, including $99 million in settled hedge gains. Delta's operations at the refinery made a $13 million profit for the June quarter, $64 million increase year-over-year. Fuel expense decreased by 40 million in the quarter.
Forecast operating margin between 15 to 17 percent in Q3.
In a recent study, 85 percent of travel managers plan to continue to use delta for future flights.
Total unit revenues increased by 7 percent, while domestic unit revenue grew 6 percent. More than 60 percent of business is domestic.
Latin unit revenues were flat and demand weakness around the World Cup.
In pacific network restructuring decreased due to weaker yen. Delta holds a yen hedge of $130 million.
Delta plans to improve international capacity.
Capacity situation in transatlantic to be a concern reporting 8 percent unit revenue.
Increased intra Asia flights by 10 percent.
Operating expense increased 3 percent due to profit sharing in the quarter.
Maintenance savings reducing maintenance costs by $60 million.
Delta investing in new technology with new systems for report agence.
Current prices of crude hedged should add another $100 million in benefit.
Guidance for the second half of 2014 to maintain capex in the 2 to 3 billion range.
Joint venture in winter quarter (second half of Q4 to first half of Q1) was between 1 to 3 percent nearly half of its previous amount.

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