Delta Air Lines Announces Highest Quarterly Revenue and Profitability in Airline’s History

One of the oldest airlines in operations Delta Air Lines Inc (NYSE: DAL) announced its highest quarterly earnings in the June quarter and provided its outlook for the September quarter of 2023. Resultantly, the company recorded a strong June quarter operating cash flow, which will ostensibly enable the airline to reduce its debt. During the quarter, Delta announced an adjusted revenue of about $14.61 billion versus the $14.49 billion expected by analysts surveyed by Refinitiv.

The airline, therefore, posted adjusted earnings per share of about $2.68 versus the $2.40 expected by Wall Street analysts surveyed by Refinitiv.

The company highlighted that the consumer demand for air travel remains high especially after the reopening of all global markets from the Covid-19 relayed restrictions. Furthermore, the company’s revenue for the June quarter was 19 percent higher than the same time last year.

According to the announcement, the June quarter recorded an operating income of around $2.5 billion with an operating margin of about 17.1 percent. With an operating cash flow of about $2.6 billion and a free cash flow of approximately $1.1 billion, Delta Air Lines announced its adjusted net debt of $19.8 billion at the end of the June quarter.

Delta Air Lines CEO Ed Bastian highlighted that the heightened demand for consumer air travel will continue in the coming years. Reportedly, Trans-Atlantic air travel jumped more than 60 percent from a year ago, compared with an 8 percent increment in domestic revenue and a 21 percent gain in passenger revenue overall.

Delta Air Lines and the Marker Outlook

Having recorded a profitable quarter, the company raised its 2023 earnings guidance to $6 – $7 per share and reiterated its recently updated outlook for $3 billion of free cash flow. For the third quarter, the company anticipates earning $2.20 to $2.50 per share, which is above analysts’ expectations, on a 16 percent increase in capacity.

“If you were to ask any quarter in which we grew capacity by high double digits and we held our overall pricing, that would be pretty amazing,” Bastian said.

Following the announcement of the quarterly earnings, Delta shares gained approximately 2.5 percent on Thursday before retracting. Nonetheless, DAL shares are up approximately 43 percent in the past three months to trade around $47.60. The $30.82 billion valued company has convinced investors of its profitable future outlook. According to a survey conducted by MarketWatch, 21 analysts gave DAL shares an average rating of Buy with a target price of $59.

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