Delta trims full-year profit outlook on higher fuel costs
By Rajesh Kumar Singh
CHICAGO (Reuters) — Delta Air Lines (NYSE:DAL) on Thursday reported stronger-than-expected quarterly earnings, but trimmed its full-year profit outlook due to higher fuel costs.
The Atlanta-based carrier's earnings report comes as signs of softening domestic travel demand have raised questions over whether consumers are cutting back on travel spending amid the depletion of household savings, the resumption of student loan repayments and high interest rates.
Delta CEO Ed Bastian cautioned against interpreting that as a broader industry trend. In an interview, he said the demand for Delta's products remain «high» as its customers are in «a very healthy condition.»
«Our domestic business is very strong,» he said.
A jump in fuel costs, however, is pressuring the company's profits. Delta now expects adjusted earnings of $6 to $6.25 per share this year, compared with $6 to $7 per share estimated in July.
The company reported an adjusted profit of $2.03 per share for the third quarter, above the $1.94 per share expected by analysts in a LSEG survey, helped by a 35% year-on-year increase in international passenger revenue.
Delta said the demand for overseas trips has remained strong through the autumn season.
In the December quarter, it expects adjusted earnings in the range of $1.05 to $1.30 per share. That compares with the $1.11 estimated by Wall Street analysts.
It forecast an adjusted operating margin of 9% to 11% in the fourth quarter, with a 9% to 12% year-on-year increase in revenue.
A rush among travelers to make up for lost time during the pandemic has allowed U.S. carriers to mitigate inflationary pressures with higher fares.
Airline fares, however, have been posting a double-digit decline from
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