Delta Air Lines Beats Expectations in First Quarter With Full-Year Revenue Seen Growing Up to 7%


Delta Air Lines (DAL) reported better-than-expected first-quarter results on Wednesday, as it benefited from an early renewal of a deal with American Express (AXP) and projected full-year revenue growth of as much as 7%.

Diluted earnings per share rose to $0.96 from $0.75 the year before, better than the Capital IQ consensus for $0.91 a share. Operating revenue climbed 7.5% to $10.42 billion, just topping the Wall Street view for $10.41 billion.

“Our March quarter performance demonstrates the power of our growing brand preference,” said Ed Bastian, the airline’s chief executive. “With the momentum in our business and our American Express contract renewal, we have increased confidence in achieving our full-year plan of top-line growth, margin expansion and double-digit earnings growth.”

Delta said earlier this month signed an 11-year renewal of its credit-card partnership with American Express, saying it expects the benefit from the relationship to double to nearly $7 billion a year by 2023.

The Atlanta-based company’s shares were up 2.7% in pre-market trading on Wednesday.

In the first quarter, total revenue per available seat mile, or TRASM, was up by 2.4% year-on-year to $16.7 million, while the expense for fuel rose 4.6% to $1.97 billion and operating expenses were 5.7% higher at $9.4 billion.

For the second quarter that ends in June, Delta is looking for EPS between $2.05 to $2.35, total adjusted revenue growth of 6% to 8% year on year and TRASM of up 1.5% to up 3.5%. The Capital IQ consensus is for $2.18 a share.

“With our customer-focused commercial initiatives delivering strong customer loyalty and top-line momentum, we now expect full-year revenue growth of five to 7%, an increase from our prior guidance,” said company President Glen Hauenstein, without providing details on the previous expectation.