Aerospace & Defense

Delta Profits, Forecast Not Taking Off

Source: Thinkstock
Delta Air Lines Inc. (NYSE: DAL) reported fourth quarter and full-year 2012 results before markets opened this morning. The airlines posted adjusted diluted quarterly earnings per share (EPS) of $0.28 on revenues of $8.6 billion. In the same period a year ago, Delta reported EPS of $0.45 on $8.4 billion in revenues. Fourth-quarter results also compare to the consensus estimates for EPS of $0.28 on revenues of $8.59 billion.

For the full year, Delta reported adjusted net income of $1.6 billion on revenues of $36.67 billion, compared with net income of $1.19 billion in 2011 on revenues of $110.88 billion. The consensus estimates called for EPS of $2.38 on revenues of $35.12 billion.

On a GAAP basis, the company reported quarterly EPS of $0.01, compared with $0.50 in the fourth quarter of 2011. Special items totaled $231 million, including to restructuring charges, an early debt extinguishment, and a mark-to-market loss on fuel hedges. Delta estimates that Hurricane Sandy cost it $100 million in airline and refinery operations.

The company’s CEO said:

We enter 2013 as a stronger airline, with initiatives in place to build on our 2012 success. In the year ahead, we will advance our position around the world and continue to build a better airline for our shareholders, customers and employees.

For the first quarter of 2013, Delta expects to post an operating margin of 2.5% to 4.5% on fuel prices of $3.15 to $3.20 per gallon and capital spending of $500 million to $600 million. Revenues are forecast to rise 4% to 6% and unit costs are forecast to rise 6% to 8%. The airlines expects seat capacity to be 2% to 4% lower in the quarter.

Shares are up fractionally at $13.67 in premarket trading this morning, in a 52-week range of $8.42 to $14.11. Prior to today’s release Thomson/Reuters had a consensus price target of around $16.30 on the company’s shares.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.