Delta records another very strong quarter

[WorldTraveler]

http://finance.yahoo.com/news/delta-air-lines-announces-june-113000930.html

9% increase in revenue

14.9% operating margin including specials

$340 million in profit sharing - for just one quarter!

PROFIT SHARING for just the first two quarters is $439 Million compared to $506 M for all of last year. DL expects to record another $350M for the next quarter. DL's profit sharing for the year should easily top $750 million.

15-17% margin expected for the 3rd quarter

domestic RASM up over 10%, Atlantic up 7%, Pacific down 3%

DCI network continues to shrink in favor of growth at mainline.

Outstanding cost controls - CASM was flat

TRAINER WAS PROFITABLE; DL's fuel cost of $2.93/gal includes hedge charges and is down 3% YOY.

$1.5 BILLION In free cash flow; adjusted net debt below $8 BILLION; $900 million contributed to pension plans; $500M in stock repurchases and dividends

 

[FrugalFlyerv2.0]

Things are looking good for DL.  Impressive again.
 
For the profit sharing:  is the money divided up evenly among all the employees or is each work group given a certain percentage?

 

[WorldTraveler]

It is based on a percentage that is the same for all profit sharing eligible employees. There is no large company I know of that pays profit sharing on an equal dollar basis to all employees.

Last year's profit sharing was 8.2% of annual earnings; this year is on track for 12% or more- that is about the equivalent of 6 weeks extra pay.

it is also worth noting that DL's concerns about overcapacity are in the Pacific while domestic is very strong. That bodes well for WN and B6 who are almost entirely domestic carriers.
DL is the most domestic of the big 3. (gets the highest percent of revenue from domestic operations). It will be very interesting to see if anyone can beat DL's 10% increase in domestic RASM. And DL did it while adding 10% more capacity to their domestic system.

 

[robbedagain]

Congrats to all the Active DL employees for a Job Well Done

 

[WorldTraveler]

robbed,
DL is a TEAM that consists of all who went before, who support the airline from the financial community, and most certainly includes active employees.

DL active employees WILL receive profit sharing.

You won't at your job and I won't because I have moved on.

However, I can celebrate the successes of people who will get things that I don't while there are clearly things that their successes provide people who went before - including contributions to DL's frozen pension contributions and a growing route system that is operating by mainline aircraft, where DL employees have priority over other partners.

DL employees work FOR each other. It is a concept that has made DL strong and unique for decades.

Few others outside of the company understand it.

 

[Kev3188]

14.9% operating margin including specials

Nice.

As for Trainer, a positive quarter is a welcome change, but the company's stated annual goal is far above the level we just saw.

BTW, they don't benchmark it's performance on profit/loss, but rather "value."



 

For the profit sharing: is the money divided up evenly among all the employees or is each work group given a certain percentage?

Dividing it equally would be far too equitable...


 

Congrats to all the Active DL employees for a Job Well Done

Thanks man!

 

[WorldTraveler]

and congrats to you as an active DL employee, Kev, for your successes. From my perspective, DL is pulling off one of the best summer performances it has seen in years.

Thank you also for your hard work which has allowed DL to accelerate funding for DL's frozen pension funds

as for Trainer, yes, it is a start. But it should silence those who have argued that Trainer is a financial weight to DL; in fact, it now, just like insourcing, is a source of profits that helps improve DL employee profit sharing. Remember that it was just this week that DL signed a contract for domestic crude to supply Trainer; DL has accomplished what it has by still using the same imported crude that the former owner said hurts profitability of the refinery.

and thank you for validating what I have said all along regarding Trainer that it is viewed in the context of DL's larger ability to have a total fuel cost advantage.

and we will see what other carriers post in terms of fuel costs but DL's total fuel cost is likely to be favorable compared to other carriers.


I hope you are thinking about how you will spend or save your profit sharing check. DL has an enormous route system that you and those you care about can use to grow their understanding of the world.

again, well done to you and your peers.

 

[700UW]

Q2 PRASM: up 5.7% (Domestic up 10%; Atlantic up 7%; Pacific down 3%, Latin down 0.7%)

 

[LD3]

Get your popcorn, round 1 is about to begin..

 

[WorldTraveler]

yes, DL noted its concerns about int'l capacity.

DL's capacity across the Pacific was up less than 1%. Given that UA has also noted concerns about capacity increases to China and Chinese carriers are leading with the increase in capacity, it isn't hard to see how DL's statement could be validated by the same statements UA is making.

DL isn't adding new routes using 777s flying 7000 miles; they are restructuring their network and adding routes from SEA - the closest gateway to Asia - using the smallest aircraft than can fly those routes.

It will be very interesting to see how well competitors do on the Pacific - but let's also remember that DL has been profitable on a year round basis flying the Pacific - the only carrier to do so.

As for Latin America, DL increased Latin America capacity by over 23% and saw yield go down by less than half of a percent. Let me know what other carrier adds that kind of capacity and is able to sustain its revenue growth as much as DL has done in Latin America.

DL continues to be enormously successful at managing its network and finding growth opportunities while managing areas that are problematic - every airline has them.

round 2, 3, and 4 will be when other carriers report to see how well they have done. Right now, DL's results set the bar for the rest of the industry.

 

[eolesen]

Of course DL's performance set the bar -- the first one up in a competition is always in first place and sometimes stays there for a while. until they get bested by someone else.

Releasing earnings is no different. They're going to be used as the benchmark for everyone else that releases, not because they're good numbers, but simply because they're the first to announce.

Yep, Pacific was weakening. Again.

But, overall, a good performance for DL.

 

[WorldTraveler]

It is precisely because DL is comfortable with its numbers that it is willing to go first

it is true not just for airlines but with any industry.

The next few days should show very strong earnings throughout the industry; the revenue environment is strong, esp. on the domestic system.

The real surprise is that AF and LH expressed concern regarding TATL capacity - not just in markets competitive with the ME3 - and yet DL's TATL performance was very strong.

Yes, the Pacific is going to be a challenge as a continued result of the devaluation of the yen and increases in capacity by Asian carriers.

There is nothing to indicate that DL is facing or will face anything that other carriers won't also face..... and DL is not trying to build an Asian network in that environment but instead rearranging the pieces to maximize profitability.

DL just noted that industry Latin revenues were down so it wasn't just a DL issue. IN fact, they said Latin industry RASM was down 5%.

 

[700UW]

It is precisely because DL is comfortable with its numbers that it is willing to go first

And where is your proof of that?
 
And you wonder why people dislike you, just like how you had to rub it in to Robbed that he wont get profit sharing, but he just got a 9.53% raise, and a $1,500 signing bonus.
 
And what are you going to do when the New AA reports the highest earnings out of all airlines?
 
Which they will release tomorrow.

 

[WorldTraveler]

because if you understood the corporate world, you would understand the psychology behind who goes when in the earnings cycle.

DL has reported first for a number of quarters and has been considered the bellwether in the industry. For now, DL still has the highest market capitalization of any western airline.

that doesn't mean that other carriers can't beat DL's performance but DL is comfortable with what it did. DL stock is leading the industry up at this hour.

we can certainly see how other carries do as they report... a 15% operating margin by multiple carriers hurts absolutely no one and is good for a whole lot. The notion that I would be AGAINST anyone making money is just nonsense.

Good for the pay raise robbed finally got. My statement was about profit sharing. DL employee profit sharing will easily exceed the pay raise that robbed received. DL employees are on track to receive double digit percentages of their salary in profit sharing on Valentine's Day 2015.

The IAM chose not to include profit sharing in its compensation formula. Right now, DL total compensation increases are surpassing what unions have negotiated in increases. WN and UA employees will also enjoy handsome profit sharing. Their employees are able to tap into the record profitability in the industry.

 

[700UW]

And Robbed will get another 3% this September, so almost 13% raise in less than two months.
 
You just cant resist to throw out a dig, and you wonder why people dislike you on here and you have over a 2000 negative score.