Delta Air Lines Stock Gains 5% on Positive Results and Guidance, Analysts Bullish on Demand Recovery
2022.04.13 18:06
Delta Air Lines (DAL) Stock Gains 5% on Positive Results and Guidance, Analysts Bullish on Demand Recovery
Shares of Delta Air Lines (NYSE:DAL) are up more than 4.5% Wednesday after the U.S. airline reported Q1 results that beat consensus estimates.
The company reported a first-quarter adjusted loss per share of $1.23, compared to the expected loss per share of $1.26. Adjusted revenue came in at $8.16 billion in the period, beating the analyst expectations of $8.12 billion.
Passenger revenue totaled $6.91 billion, below the estimated $7.07 billion. The passenger load factor stood at 75%, compared to the analyst consensus of 79%.
Delta reported available seat miles of 51.81 billion in the quarter, short of the analyst expectations of 52.22 billion. Revenue passenger miles stood at 38.70 billion, compared to the expected 41.52 billion. Yield per passenger mile totaled 17.85c, above the consensus estimates of 17.38c.
For the second quarter, Delta expects an operating margin in the range of 12% to 14% and gross capital expenditures of roughly $1.2 billion. The company expects a Q2 capacity of around 84% compared to the June quarter of 2019, and total revenue in the range of 93% to 97%, versus the June quarter of 2019.
“With a strong rebound in demand as omicron faded, we returned to profitability in the month of March, producing a solid adjusted operating margin of almost 10 percent,” said Delta Air Lines CEO Ed Bastian.
The airline said business travel recovery was fueled by stronger corporate sales.
Cowen analyst Helane Becker reflected positively on the results.
“Demand remains strong as Covid continues to recede and countries eliminate testing and quarantine requirements. Business travel is improving with domestic corporate sales 70% recovered in the month of March. We reaffirm our forecast for strong international traffic on the North Atlantic this summer,” Becker said in a client note.
MKM Partners analyst Conor Cunningham added:
“Delta is having no issues pushing price as demand has surged back with leisure, corporate, and international all improving,” Cunningham wrote in a note.
By Senad Karaahmetovic
