Tepid outlook overshadows strong Delta profit in 4Q

Published 01-15-2019

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ATLANTA (AP) - Delta Air Lines' surging profit was overshadowed by tepid expectations for the current quarter amid broader concerns about the global economy, lower fuel prices and the ongoing U.S. government shutdown.

The Atlanta carrier on Tuesday reported fourth-quarter profit of $1.02 billion, or $1.49 per share. Earnings, adjusted for non-recurring gains, were $1.30 per share, or 3 cents better than was expected by analysts surveyed by Zacks Investment Research. Those numbers compare with last year's quarterly profit of $299 million, or 42 cents per share.

The airline posted revenue of $10.74 billion in the period, just shy of expectations but up from last year's $10.23 billion in the same quarter.

Delta Air Lines Inc. expects full-year earnings to be $6 to $7 per share, but its per-share profit expectations of 70 to 90 cents per share for the current quarter were a little weaker than Wall Street had expected.

The declining price of fuel has some investors concerned about near-term growth as airlines have a tendency to compete harder for flyers by slashing ticket prices.

A closely watched figure, revenue per mile, rose a less-than-expected 2.7 percent in the fourth quarter, more than a full point less than Delta had forecast in the fall.

Two weeks ago, shares in Delta slid more than 9 percent after it trimmed its revenue forecast for the fourth quarter. It dragged the rest of the industry with it and stoked fears that airlines may not be in position to dictate seat prices, especially if the global economy continues to show signs of slowing.

Delta also said the government shutdown could have a negative impact on its first quarter. Increasing reports of long security lines at airports could deter travel as long as the government remains closed. The Transportation Security Administration says no-shows among screeners - who aren't getting paychecks during the shutdown - jumped in recent days, to more than double the usual this time of year.

Delta shares fell about 1.5 percent before the bell. Shares in the airline are down about 20 percent from this time last year.

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This story was generated by Automated Insights (http://automatedinsights.com/a

Two weeks ago, shares in Delta slid more than 9 percent after it trimmed its revenue forecast for the fourth quarter. It dragged the rest of the industry with it and stoked fears that airlines may not be in position to dictate seat prices, especially if the global economy continues to show signs of slowing.

Delta also said the government shutdown could have a negative impact on its first quarter. Increasing reports of long security lines at airports could deter travel as long as the government remains closed. The Transportation Security Administration says no-shows among screeners - who aren't getting paychecks during the shutdown - jumped in recent days, to more than double the usual this time of year.

Delta shares fell about 1.5 percent before the bell. Shares in the airline are down about 20 percent from this time last year.

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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DAL at https://www.zacks.com/ap/DAL

Delta shares fell about 1.5 percent before the bell. Shares in the airline are down about 20 percent from this time last year.

_____

This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DAL at https://www.zacks.com/ap/DAL

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