News Column

Delta's earnings up with Latin America, domestic passengers

July 23, 2014

By Bart Jansen, USA TODAY

With growth in Latin American and domestic passenger revenue, Delta Air Lines reported Wednesday a 9% gain in operating revenue during the second quarter, compared with last year.

Delta's pretax income was $1.4 billion during April, May and June, an increase of $593 million last year. Net income was $889 million during the quarter, or $1.04 per diluted share, for an operating margin of 15.1%.

Through its $0.06 per share quarterly dividend, the company paid $101 million to shareholders, part of $550 million returned to shareholders through mid-July.

Delta CEO Richard Anderson said quarterly growth of 9%, with $1.5 billion in cash flow, shows the company's financial strength. He projected operating margins of 15% to 17% during the third quarter. "All credit goes to Delta people worldwide who not only produced this record financial performance, but also continue to lead the industry in operational reliability and customer satisfaction," Anderson said.

Jamie Baker, a JPMorgan analyst, said the quarterly report provided no surprises, with profit of $1.04 per share. But the questions will focus on how the airline will manage international capacity.

"Given investor concerns in regard to international capacity trends and what we consider Delta's determination to continue trumping consensus expectations, we actively ponder whether the company intends to trim its own capacity contributions later this year and into next," he said.

The biggest quarterly gains in passenger revenue came in Latin America, with 22.6%, and domestically, with 15.7%. But Pacific revenue fell 2.6%.

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Source: USA Today

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