DL reports strong $444M profit

WorldTraveler

Corn Field
Dec 5, 2003
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http://finance.yahoo.com/news/delta-air-lines-announces-march-113000397.html

DL leads the industry in reporting for the 1st quarter 2014.

$99M more in profit sharing - just for the first quarter.

Domestic and Latin America revenue growth fuel profits and 5% overall revenue growth

GAAP CASM decreased.

Fuel expense down %167M despite operational loss at Trainer; average price per gallon down 20+ cents per gallon.

Asia and cargo revenues show weakness.

DL is forecasting a whopping 14-16% operating margin for the now current quarter, twice this quarter's rate.

If DL posts the same type of profit for the 3rd quarter as the 2nd, they will be heading for a $3 billion plus profit this year. Profit sharing could top $600M for the year.
 
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DL says they will become the largest revenue carrier at SEA by this summer.

WOW!

All of the SEA domestic flying that has been flown to date is profitable.

NYC is showing double digit RASM increases and is expected to be solidly profitable for the year.

DAL stock is up more than 5% at this hour, leading the US airline industry.
 
Is that SEA stat in your above link (it shows a security warning, so I won't open it)? If not, where'd you get it? The internal memo to employees only notes that the SEA & NYC operations are on the right track.
 
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it's a yahoo press release... same one that DL probably sent to you or you can find on delta.com

Now, the comments about SEA and NYC came during the conference call.

Granted DL will be operating 9 int'l routes from SEA this summer but to become the largest revenue carrier in someone else's HDQ city is a pretty big step to establishing SEA as DL territory and the west coast to Asia as a market DL is fully competitive in.

as one of the few ACTIVE DL employees on here, congrats to you for another job very well done.
 
WT,  I think you got a little excited when you were posting.  DL's pre-tax income was 444 mil not profit.  And net income was 213 mil.   Still all good numbers and great increases from same Q last year.
 
Congrats to Delta and their employees for the great numbers for a Q1 kick off in 2014.  The good news will continue tomorrow when SWA reports.  Hope UAL  doesn't report tomorrow, they are expecting another loss.
 
Enjoy the profit sharing guys and again congrats!!!
 
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swamt said:
WT,  I think you got a little excited when you were posting.  DL's pre-tax income was 444 mil not profit.  And net income was 213 mil.   Still all good numbers and great increases from same Q last year.
 
Congrats to Delta and their employees for the great numbers for a Q1 kick off in 2014.  The good news will continue tomorrow when SWA reports.  Hope UAL  doesn't report tomorrow, they are expecting another loss.
 
Enjoy the profit sharing guys and again congrats!!!
you are right... and that actually raises an important point.

DL is accounting for taxes again, something most legacy airlines haven't done in a long time. DL still has enough tax assets that it will not need to pay cash taxes but the number actually is more meaningful when compared with other transportation companies like WN which do pay taxes.

also, DL profit sharing is calculated based on pre-tax earnings.

WN's day is indeed tomorrow along with UA and I suspect it will be two entirely different tales.
 
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Kev et al,
the transcript from DL's earnings conference call is available at Seeking Alpha.

http://seekingalpha.com/article/2158233-delta-air-lines-ceo-discusses-q1-2014-results-earnings-call-transcript?part=single

you may have to register to view it if you haven't already.

note the terminology that was used



"This morning we reported a $444 million pre-tax profit for the March quarter, which is an increase of $363 million over last year..."

and some color on revenues

Passenger unit revenues increased 3.2%, driven by both higher loads and yields. There was about 0.5 point RASM benefit in the quarter from the storm cancellations. We saw our best unit revenue performance in the domestic system, which increased 6%. We saw particular strength in hub-to-hub flying, continued strong results in Atlanta and importantly, both Los Angeles and Seattle delivered high-single digit unit revenue improvement on double-digit capacity growth. In fact, Seattle had the highest domestic unit revenue gain of any of our hubs for the quarter.

Internationally, trans-Atlantic was our best performing entity despite the impact of the shift of Easter into April....
Latin unit revenues were flat as we absorbed an 18% increase in capacity primarily to Mexico and Brazil to improve connectivity with our partners Aeromexico and GOL. In the Pacific, our unit revenues were down 5% on flat capacity. The yen weakened 11% year-over-year, moving from 92 in the first quarter of 2013 to its current level of around 102. This weakness drove a $54 million decrease in revenues, but the bulk of that was offset by our hedges as well as savings and expense. You should note our yen hedge book at the end of March had a value of $118 million. One bright area in the Pacific portfolio has been China, with all of our China market showing year-over-year unit revenue gains despite a 15% capacity increase.


more revenue growth is coming....



Looking beyond the June quarter, we see a number of sources of profitable revenue growth, which we’ve been aggressively investing in over the last six years. First, our investments in the network, product and operations are producing solid, sustainable revenue gains, but there is more room for growth.

and here is the SEA comment

Glen W. Hauenstein


Well, we’ve been very excited about the spool in Seattle so far. As a matter of fact in the month of March, all of our new domestic markets were segment profitable and Seattle’s margin improved by 8 margin points year-over-year despite a 22% increase in revenue. So we’re off to a great start, and we have a lot more to go in Seattle. So we’re looking forward to those all coming online over the next few months. And we do expect to become Seattle’s largest carrier in terms of revenues in the third quarter of this year. So we’re well ahead of our own internal forecast on Seattle and we’re pretty excited about the early returns.
 
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with all of the big 4 having now reported, DL led the industry in RASM growth with WN close behind and DL also had the lowest fuel cost.

DL had a 4-5% fuel cost advantage over both B6 and UA, DL's largest competitors in NYC.

Based on the the current quarter financial results, DL is a larger airline than UA now.
 
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since you tagged onto an existing thread, let's be clear that this profit is NOT for the current quarter which just ended Monday

second, as noted elsewhere, if DL, which typically is a bellwether for RASM performance in the industry, says that increased capacity is hurting yields, it bodes poorly for the whole industry or at least in int'l markets where DL says the problem was most significant.

Second, if the problem is a lack of business demand in Latin America, DL will not be the carrier most impacted because DL is not the largest airline to Latin America, including to Brazil.

you know who that leAAves

major global sporting events have often resulted in lower revenues... the same thing happened in London with the Olympics there.

Brazil reported even before the World Cup that hotel bookings and booked load factor was below average; convention activity and most major business activity has all but ended in Brazil.
 

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