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Delta Air Lines announces fourth quarter and full year 2017 profit

Published : Sunday, 14 January, 2018 at 12:00 AM Count : 35

Jan 12: Delta Air Lines (Atlanta) on January 11, 2018 reported financial results for the fourth quarter 2017.  Highlights of those results, including both GAAP and adjusted metrics, are below and incorporated here.
Adjusted pre-tax income for the fourth quarter 2017 was $1.0 billion, despite a $60 million impact from the combination of December's power outage at Atlanta's Hartsfield-Jackson Airport and Winter Storm Benji.  For the full year, adjusted pre-tax income was $5.5 billion, a $621 million decrease relative to 2016.
"Delta people rose to the challenges of 2017 to produce solid financial results, industry leading operational reliability and strong improvements in customer satisfaction, and it's an honor to recognize their achievements with $1.1 billion in profit sharing," said Ed Bastian, Delta's chief executive officer.   "Looking ahead to 2018, we expect to drive solid earnings growth by growing our top line 4 to 6 per cent, improving our cost trajectory and integrating our international partner network.  As a result, we are able to increase our previous full-year guidance to $6.35 to $6.70 per share due to additional benefits from tax reform."
Delta's operating revenue of $10.2 billion for the December quarter was up 8.3 per cent, or $787 million versus prior year.  Total unit revenues excluding refinery sales increased 4.4 per cent for the December quarter.
Passenger revenue increased $527 million, including $200 million from Delta's Branded Fares initiatives.  Passenger unit revenues increased 4.2 per cent, including 0.5 points from one-time revenue adjustments, on 2.3 per cent higher capacity.
Cargo revenue increased 14.4 per cent, driven by higher volumes and yields.  Other revenue improved 17.9 per cent primarily due to higher loyalty revenue and a $150 million increase in third-party refinery sales.
For the full year, Delta's operating revenue of $41.2 billion was up 4.0 per cent, or $1.6 billion versus prior year.  Total unit revenues excluding refinery sales increased 2.4 per cent on 1.0 per cent higher capacity.
"We enter 2018 with significant momentum and every entity delivering positive passenger unit revenue for the first time in five years, driven by a robust demand environment and improving business fares," said Glen Hauenstein, Delta's president.  "We expect to deliver total unit revenue growth of 2.5 to 4.5 per cent in the March quarter and leverage our unrivaled domestic network, international partnerships, and solid pipeline of commercial initiatives to deliver similar performance each quarter throughout 2018."
For the first quarter, Delta is expecting improving revenues and the benefit from tax reform to partially offset fuel cost increases and the period of highest non-fuel expense growth for the year.
Adjusted fuel expense2 increased $349 million compared to the same period in 2016 as market fuel prices increased throughout the quarter.  Delta's adjusted fuel price per gallon for the December quarter was $1.93, which includes $0.03 of benefit from the refinery.

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