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Delta Exceeds Quarterly Earnings Expectations, Emphasizes Efficiency Amid Steady Growth

Delta Air Lines rebounded to profitability in the first quarter, buoyed by robust bookings for both leisure and business travel, signaling strong consumer confidence in travel as the peak season approaches.

CEO Ed Bastian highlighted the ongoing prioritization of travel as an investment in personal well-being among consumers. The airline projected second-quarter earnings between $2.20 to $2.50 per share, exceeding analysts’ average estimate of $2.23 per share, and anticipated revenue growth of up to 7%, surpassing analysts’ forecasts. Delta reaffirmed its full-year earnings outlook of $6 to $7 per share and free cash flow projections ranging between $3 billion and $4 billion.

Business travel showed signs of improvement in the last quarter, with a notable 14% increase in corporate travel sales. Sectors such as technology, consumer goods, and financial services exhibited strong demand, contributing to the positive outlook for the airline.

Delta, like its counterparts in the industry, has adopted a more measured approach to hiring after an extensive post-pandemic recruitment drive, shifting focus towards enhancing operational efficiency. Bastian indicated that the company’s workforce is expected to see modest single-digit growth compared to the previous year.

Following the earnings release, Delta’s shares surged nearly 5% in premarket trading, reflecting investor optimism.

In the first quarter, Delta reported earnings of $37 million, or 6 cents per share, a significant turnaround from the $363 million loss, or 57 cents per share, recorded in the same period last year. Adjusted earnings stood at $288 million, or 45 cents per share, compared to $163 million, or 25 cents per share, in Q1 2023.

Revenue, excluding refinery sales, totaled $12.56 billion, marking a 6% increase year-over-year but slightly missing analysts’ expectations.

The airline’s unit cost, excluding fuel expenses, rose by 1.5% compared to the previous year. Delta observed a 3% increase in domestic unit revenues from the previous year, with record-high load factors achieved during the traditionally slower travel period of the first quarter.

Delta’s CFO, Dan Janki, emphasized a focus on optimizing operations and restoring profitability across core hubs amid the normalization of growth, signaling a strategic shift towards efficiency gains.

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