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Delta Air Lines (DAL) earnings Q4 2022


Delta Air Lines fourth-quarter profit and revenue topped expectations on Friday due to a powerful finish to last 12 months, but shares fell on the carrier’s outlook for the primary quarter.

Delta said it expects to earn 15 cents to 40 cents a share on an adjusted basis in the primary quarter of 2023, below what analysts expected.

The airline said its sales will likely increase 14% to 17% over the identical quarter of 2019, with capability down 1% from 4 years earlier, but that higher costs will likely weigh on profits But it surely said unit costs, stripping out fuel, will likely increase 3% to 4% from 2022, including for labor and rebuilding its network.

Delta’s pilots union is reviewing a contract proposal this week that features raises topping 30% over 4 years. The Air Line Pilots Association said Friday that it has finalized language for a tentative agreement with the corporate, and that the union could vote on that in the approaching days. It will then go to pilots for a ratification vote.

Delta also reiterated its full-year 2023 earnings estimate of $5 to $6 a share.

The corporate’s shares fell greater than 3% Friday, while rivals’ ended barely higher.

Here’s how Delta performed within the fourth quarter, compared with Wall Street expectations based on Refinitiv consensus estimates:

  • Adjusted earnings per share: $1.48 vs. $1.33 expected.
  • Adjusted revenue: $12.29 billion, excluding refinery sales, vs. $12.23 billion expected.

The airline generated $13.44 billion in total sales for the ultimate three months of 2022, 17% higher than the $11.44 billion it brought in three years earlier.

High costs ate away at a few of Delta’s profits, but its net income still totaled $828 million, down from $1.1 billion in the identical three-month period of 2019, but on 9% less flying than three years earlier. It was an indication of travelers’ willingness to proceed booking, even at high fares, which greater than made up for the increased expenses.

Delta’s operating costs rose 19% within the fourth quarter from 2019, including a $2.8 billion fuel bill, up 42% from 2019.

Delta CEO Ed Bastian said in a news release that the carrier “rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance.”

Bastian told CNBC that demand for premium products has remained robust. Within the airline’s release, it said that premium revenue, which incorporates seats in first-class, rose 13% within the last quarter, 8 points above sales growth from the major cabin.

Delta has been cracking down on crowding in its luxury airport lounges, the results of strong demand for rewards bank cards and travelers with elite status. Next month it’ll raise the necessities for entry, and this week, said it’s curbing worker access to Sky Clubs.

Airlines have largely been upbeat in regards to the fourth quarter, despite concerns a couple of recession and weakness from some retailers and other businesses. On Thursday, American Airlines hiked its revenue and profit forecast for the period, sparking a broad rally within the sector.

That was even after severe winter weather disrupted flights coast to coast over the year-end holidays, prompting mass cancellations. Southwest Airlines specifically struggled to get well and said its meltdown could cost it greater than $800 million. American and Southwest are scheduled to report on Jan. 26.

“There was quite a lot of customers on the lookout for airlines given a few of the Southwest challenges, and we got a profit from that,” Bastian said in an interview with CNBC’s “Squawk Box.”

Correction: Delta had a fourth-quarter fuel bill of $2.8 billion, up 42% from 2019. An earlier version misstated the timing.

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