A Delta aircraft landed from Los Angeles on October 31, 2021 at Kingsford Smith International Airport in Sydney, Australia.
James D. Morgan | Getty Images
Delta Air Lines Thursday said the surge in Covid-19’s Omicron variant would drive it to a loss in the first quarter, but that’s it. Still expecting Travel demand to rebound and make a profit this year.
In the fourth quarter, Delta recorded the highest revenues since late 2019. This is partly due to strong vacation bookings and more business trips. Sales of $ 9.47 billion exceeded analysts’ expectations of $ 9.21 billion.The company has not fully recovered yet COVID-19 crisis. Revenues for the last three months of 2019, just before the start of the coronavirus pandemic, fell 17% from $ 11.44 billion.
Delta’s stock rose 2.7% in pre-market trading after the company reported its results.
CEO Ed Bastian said Omicron is expected to delay the recovery of travel demand by 60 days.
President Glenn Hauenstein said, “The recent increase in COVID cases associated with Omicron variants is expected to impact the pace of demand recovery at the beginning of the quarter, with recovery momentum starting on President’s Birthday weekend. I will resume. “
According to the average estimate compiled by Refinitiv, Delta’s performance compared to what analysts expected is:
- Adjusted earnings per share: 22 cents compared to the expected 14 cents.
- Revenue: $ 9.47 billion against the expected $ 9.21 billion.
Delta posted a net loss of $ 408 million in the fourth quarter due to increased fuel and other costs. This is partly due to the confusion caused by the diffusion of Omicron. Adjusting for temporary items, Delta reported a profit per share of 22 cents, above Wall Street’s expectations of 14 cents.
Delta reported a full-year profit of $ 280 million, thanks to $ 4.5 billion in federal aid to airline labor costs during the crisis. This is the first time in two years. In 2020, after a plunge in travel demand, Delta suffered the largest loss in history at $ 12.4 billion.
Delta was the first US airline to report fourth-quarter results and provide detailed forecasts of the impact of variants on its business.The rapid spread of Omicron is from theaters to restaurants to Retail company When grocery store..
Airlines, including Delta Air Lines, have canceled thousands of flights since Christmas Eve due to a shortage of staff due to a surge in crew Covid infections.
Delta said operations are stable and Omicron has canceled only 1% of flights in the past week.
However, Omicron will refrain from making reservations for the time being, the airline said.
Delta CFO Dan Janki said in a statement, “Despite the March quarter loss forecast, we will generate sound profits in the June, September and December quarters, with meaningful profits in 2022. It can be produced. “
Investors have largely avoided the impact of Omicron on their carriers. Delta’s share has risen 3.9% from this year to Wednesday, United When American Shares are up 6.3% and 3%, respectively. The S & P 500, Compared to, it has decreased by 0.84%.
Delta expects first-quarter revenue to be 24% to 28% below 2019 levels, with capacity below 15% to 17% three years ago. Excluding fuel, the cost is expected to increase by about 15% from 2019.
Airlines compare their results to 2019 to show how much their business has recovered from pre-pandemic levels.
Some of Delta and other airlines’ challenges this year are increasing employment to meet travel demand. This is a challenge in the tough labor market.
Delta executives will take a 10 am ET call to elaborate on 2022 results and outlook.
Delta Air Lines (DAL) Revenue 4Q 21
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