Delta Air Lines Stock Falls After Q3 Results, Expects Fuel Pices To Hurt Q4 Profit

Delta Air Lines, Inc. DAL reported a third-quarter FY21 adjusted operating revenue decline of 34% from 3Q19 to $8.28 billion, missing the consensus of $8.4 billion. GAAP Operating revenue was $9.154 billion, down 27% from 3Q19.
Operating revenue on an adjusted basis for the September quarter of 2021 improved 30% sequentially.
Adjusted EPS of $0.30 topped the consensus of $0.17.
Total passenger revenue was $7.19 billion, a decline of 37% from 3Q19. Total passenger revenue was 63% recovered on system capacity that was 71% restored compared to 2019 levels.
Cargo revenue increased by 39% to $262 million, and Other revenue increased by 77% to $1.7 billion, both compared to 3Q19.
Q3 operating income was $2.21 billion, an increase of 6% from 3Q19.
Delta Air Lines generated an operating cash flow of $151 million, compared to $2.25 billion in 3Q19. Free cash flow was negative $463 million for the quarter, with net capital expenditures reinvested in the business of $619 million.
Delta Air Lines held cash and cash equivalents of $9.66 billion as of September 30, 2021.
Total revenue per available seat mile increased by 2% from 3Q19, while the passenger load factor was at 80% vs. 88% in 3Q19.
System yields improved 4%, and system load factors improved 11 points to 80% versus the June 2021 quarter.
The company noted that the recent rise in fuel prices would pressure its ability to remain profitable for the December quarter.
Q4 Outlook (compared to Q4 2019): Delta Air Lines expects capacity to be 80% restored, total revenue recovered to low 70s percentage; capital expenditures to be ~$1.2 billion; adjusted net debt of ~$22 billion.
Price Action: DAL shares are trading lower by 2.62% at $42.36 on the last check Wednesday.

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