Carrier Beats Wall Street Expectations
Delta Air Lines Inc. reported Wednesday it saw a profit in the
second quarter, pointing to a 5.5 percent gain in sales that beat
Wall Street expectations -- when one-time items are excluded.
The carrier said it recorded a net income of $1.77 billion, or
$4.49 per share, for the three months ending June 30. This is
compared to a $2.21 billion loss during the same period last year,
according to the Associated Press.
The nation's third-largest carrier reported a profit of $274
million, or 70 cents per share, in the second quarter excluding
reorganization and related one-time items. Analysts surveyed by
Thomson Financial were expecting 59 cents per share.
Those reorganization and related one-time items are due to the
discharge of liabilities and claims during bankruptcy proceedings
plus the adoption of fresh-start reporting, the carrier said.
The carrier claimed Chapter 11 bankruptcy on September 14, 2005,
as ANN reported, and emerged
April 30. During the bankruptcy, Delta restructured its operations,
survived a hostile takeover attempt by US Airways and slashed
billions in costs.
"Delta's emergence from bankruptcy was a significant milestone
in the history of the company and the airline industry," said
Gerald Grinstein, Delta's chief executive officer. "In delivering
the kind of outstanding financial, operational and customer service
results we saw this quarter, it is clear Delta people at every
level are producing a strong airline with a bright future."
The carrier recorded roughly $40 million in cash gains on fuel
hedge contracts that were settled and revenue for the quarter rose
to $5 billion, compared to $4.74 billion last year.
At the end of the quarter, Delta reports it had $3.7 billion in
cash, cash equivalents and short-term investments; $3.4 billion of
this was unrestricted. It also has $1 billion available in
unrestricted liquidity under its undrawn revolving credit
facility.
A new chief executive officer still needs to be found to
replace outgoing CEO Grinstein. The company also needs to decide
what to do with its regional feeder, Comair.
"The June quarter results announced (Wednesday) include $1.1
billion in free cash flow showing solid evidence that our plan is
working. As a result of our strong operating performance, we're
pleased to report that we accrued $79 million in profit sharing for
the quarter that we expect will be paid to employees early next
year to reward them for all their hard work." said Edward H.
Bastian, Delta's executive vice president and chief financial
officer.
"Our turnaround continues to take hold, but is not complete --
we must remain vigilant in driving revenue and cost improvements,
especially in light of increasing fuel prices."