Delta Airlines June Quarter EPS in Line, Miss on Revenue Expectations

Delta Air Lines (NYSE: DAL) has reported its financial results for the June quarter of 2024, showcasing a mixed performance.

Delta Air Lines, Inc. (NYSE: DAL) has announced its financial results for the June quarter of 2024, showcasing a mixed performance. The company achieved a record operating revenue of $16.7 billion with an adjusted figure of $15.4 billion, reflecting a 5.4% increase from the same quarter last year. The operating income stood at $2.3 billion, translating to an operating margin of 14.7%. The pre-tax income was $2 billion, yielding a pre-tax margin of 13.0%. Earnings per share (EPS) were $2.36, aligning with the company's strong financial health and operational prowess.

Delta's operational excellence is further highlighted by its cash flow metrics. The operating cash flow for the quarter was $2.5 billion, with free cash flow reaching $1.3 billion. The airline also made significant strides in debt reduction, with payments on debt and finance lease obligations amounting to $1.4 billion, bringing the total debt and finance lease obligations down to $18.0 billion. The company's adjusted debt to EBITDAR ratio improved to 2.8x from 3.0x at the end of 2023, demonstrating a solid balance sheet and financial stability.

When comparing Delta's current performance to market expectations, the results are mixed. Analysts had anticipated an EPS of $2.36, which Delta matched precisely. The company's reported revenue of $16.7 billion exceeded the expected $15.47 billion, showcasing Delta's ability to surpass revenue forecasts significantly.

Despite this, the GAAP EPS came in at $2.01, below the expected $2.36, indicating some areas where the company fell short of market projections. The adjusted figures provide a clearer picture of Delta's performance. The adjusted operating revenue of $15.4 billion was slightly below the expected $15.47 billion, but the adjusted EPS of $2.36 met expectations.

This alignment with market projections on an adjusted basis suggests that Delta's core operations are strong, even if some GAAP metrics were impacted by non-operational factors such as mark-to-market adjustments on investments and losses on debt extinguishment.

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