Delta Air Lines Q3 2022 Earnings Report Recap

^{Source: Predictions based on analysts' consensus from Visible Alpha}

Delta Air Lines (DAL) Financial Results: Analysis

Delta Air Lines Inc. (DAL), the world's largest airline prior to the pandemic, earned slightly less than expected in the third quarter, although its second-highest load factor in two years suggests business is improving.

Delta's adjusted earnings per share (EPS), excluding certain items, more than quintupled year-over-year (YOY) to $1.51, just below a consensus estimate of $1.53. Revenue jumped 52.7% to $14.0 billion, below expectations for an increase of almost 54%. Hurricane Ian cut profit by 3 cents per share and took a $35 million chunk out of operating revenue. The air carrier said it expected to post another profit in the December quarter.

The results show that some headwinds persist for Delta as the economy falters. At the same time, though, business bookings stand at 80% of 2019 levels, a figure that jumps to 97% for international passenger revenue.

DAL Load Factor

The carrier reported load factor, a key metric for airplanes because it costs about the same to send an aircraft into flight whether 50 or 100 paying passengers are aboard, came in at 87%, just below expectations of 87.7%. A higher load factor means an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable.

DAL Outlook and Stock Performance

Delta said that a shift in customer spend toward experiences and improving business and international travel should boost revenue as much as 9% and operating margin to as high as 11% compared to the 2019 fourth quarter. The carrier, which sustained heavy financial losses during the pandemic, said it expected to be cash flow positive for all of FY 2022.

Delta shares, down 28.3% this year compared with a 19% decline in the S&P 500 Index, were up less than 1% as of 10:45am ET.

The company is expected to release fourth-quarter earnings on Jan. 12, 2023.