Delta Air Lines Shares Fall On Mixed Outlook; Q4 Earnings Exceed Expectations

  • Delta Air Lines Inc DAL reported a fourth-quarter FY22 adjusted operating revenue growth of 8% from Q4 FY19 to $12.3 billion, and operating revenue on a GAAP basis was $13.4 billion, beating the consensus of $12.23 billion.
  • Adjusted EPS was $1.48 above the consensus of $1.33.
  • Total passenger revenue was $10.9 billion, 6% increase from 4Q19. Cargo revenue increased by 33% to $248 million compared to 4Q19.
  • Delta recorded an adjusted operating income of $1.4 billion, flat with 4Q19, and the adjusted operating margin was 11.6%, down by 90 bps.
  • Total operating expenses increased by 19.2% from 4Q19 to $11.9 billion in the quarter.
  • Delta Air Lines generated an operating cash flow of $1.2 billion. Adjusted net debt at quarter-end was $22.3 billion.
  • Delta ended the December quarter with $3.5 billion in cash and equivalents.
  • Total revenue per available seat mile increased by 29% from 4Q19 and increased 19% on an adjusted basis. The passenger load factor was 85% vs. 86% in 4Q19.
  • Compared to 4Q19, CASM-Ex was 13% higher.
  • Adjusted fuel price of $3.20 per gallon jumped 61% from 4Q19.
  • Outlook: For Q1 FY23 (compared to Q1 2019): On a non-GAAP basis, Delta Air Lines expects total revenue to be up 14%-17% and EPS to be $0.15 - $0.40, against an estimate of $0.55. It sees Q1 operating margin of 4% - 6%.
  • DAL expects FY23 total revenue to be up 15% - 20% and EPS to be $5 - $6 versus an estimate of $5.07.
  • Price Action: DAL shares are trading lower by 5.30% at $37.50 in premarket on the last check Friday.
  • Photo Via Wikimedia Commons
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