Delta Air Lines Reports Record Q3 Revenue of $12.56B, Adjusted EPS of $2.32, up 29% Year Over Year

This morning Delta Air Lines announced third quarter earnings, with revenue of $12.56B, a slight miss from the estimate of $12.6B. Adjusted earnings per diluted share beat the $2.26 estimate, coming in at $2.32, a 29% increase over last year.

According to the Delta Air Lines Press Release, the company returned $468M to shareholders with dividends and share repurchases. Third quarter highlights include and adjusted pre-tax income increase of $361M, up 22% year over year. An adjusted EPS of $2.32 reflects 6.5% in top line growth, a 2.5% of operating margin expansion and free cash flow of $1.4B. The company served a record 55.3M passengers during the quarter, booking an adjusted revenue of 12.56B (excluding refinery sales). Adjusted unit revenue increased 2.5% on strong leisure and corporate demand with approximately 1% attributed to an amended agreement with American Express. Cost per available seat mile (CASM) decreased 2.1% vs. last year, largely attributable to lower fuel costs and increased capacity. Expenses other than fuel (CASM-Ex) increased 2.4% on higher employee costs, weather and record passenger numbers, partially attributable to the Boeing 737 MAX grounding at competing airlines. Delta does not operate the type, but their pilots earned record overtime to accommodate the increased passenger volume. During the quarter, Delta paid out $260M in shareholder dividends and invested $208M in share repurchases. On a year-to-date basis, the company generated $7.5B in operating cash flow and $4.0B in free cash flow, after investing $3.5B in the business. In the announcement, Delta CEO Ed Bastian stated,

“Our powerful brand and competitive strengths drove another quarter of great results for our people, customers and owners. Our people bring our brand to life on every flight and I’m pleased to recognize their outstanding efforts with over $1 billion in profit sharing accrued so far this year. Demand for the Delta product remains healthy, positioning the company for a strong close to 2019 with expectations for more than 20% earnings growth, over $4 billion in free cash flow and a 5th year of pre-tax earnings over $5 billion.”

Delta has declared their 26th consecutive quarterly dividend of $0.4025/share payable November 14, 2019 for shareholders of record at the close of business October 24, 2019. In pre-market trading on Thursday (8:22 EST), Delta Air Lines, Inc. stock (NYSE: DAL) was trading 3.39% lower at $52.09/share.

Source: Delta Air Lines