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Delta navigates nasty winter, tops profit forecast

Published on NewsOK Modified: April 23, 2014 at 11:10 am •  Published: April 23, 2014
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DALLAS (AP) — Delta Air Lines Inc. is making more money by filling more seats on its planes and paying a bit less for fuel.

Delta's first-quarter profit beat expectations and underscored how most big airlines are prospering with a combination of strong business travel, slightly higher fares and money from extra fees.

Even bad weather couldn't stop Delta from boosting profit, although it canceled more than 17,000 flights in January and February — double the number from a year ago — which cost the company $90 million in revenue and $55 million in pretax income.

The Atlanta-based airline said Wednesday that it expects solid demand throughout the year, and it predicted that a key statistic of revenue per mile will grow in the mid-single digits during the April-through-June second quarter.

Delta shares jumped $1.72, or 4.9 percent, to $36.67 in midday trading after hitting an all-time high of $37.41 earlier in the session. They began the day up 27 percent in 2014.

Delta said that net income in the first quarter was $213 million, or 25 cents per share, up from $7 million, or a penny per share, a year earlier.

Excluding items such as fleet-restructuring costs and fuel-hedging, Delta earned 33 cents per share. Analysts, who usually exclude one-time costs and benefits like that, were expecting 29 cents per share, according to FactSet.

Revenue rose 5 percent to $8.92 billion, matching analysts' forecasts.

Passengers flew 4 percent more miles than in early 2013, which helped boost occupancy to 82.7 percent on the average flight, up from 81.2 percent a year ago. The average fare per mile rose 1 percent.

Including Delta Connection regional flights, the company spent $2.70 billion on fuel, its largest expense in the quarter. Still, that was a savings of $109 million, or 4 percent, as Delta paid $3.03 per gallon instead of last year's $3.24. The company expects total fuel costs of $2.97 to $3.02 per gallon in the second quarter.

The break on fuel spending more than offset an increase of $58 million, or 3 percent, in labor costs, the company's second-biggest expense at $1.97 billion.

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