Delta Air Lines sales, profits top estimates in strong finish to 2022

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Delta Air Lines Airbus A330neo or A330-900 aircraft with neo engine option of the European plane manufacturer, as seen departing from Amsterdam Schiphol AMS EHAM International airport.
Nicolas Economou | NurPhoto | Getty Images

Delta Air Lines fourth-quarter profit and revenue topped expectations on Friday, but shares fell on the carrier’s outlook for the first quarter.

Delta expects to earn 15 cents to 40 cents a share on an adjusted basis in the first quarter of 2023 and for its sales to increase 14% to 17% over the same quarter of 2019, with capacity down 1% from four years earlier.

But it said unit costs, stripping out fuel, will likely increase 3% to 4% from 2022, including for labor and rebuilding its network. Delta pilots’ union are reviewing a contract proposal this week that includes raises topping 30% over four years.

Delta reiterated its full-year 2023 earnings estimate of $5 to $6 a share.

The company’s shares were down roughly 3% in premarket trading Friday.

Here’s how Delta performed in the fourth quarter, compared with Wall Street expectations based on Refinitiv consensus estimates:

  • Adjusted earnings per share: $1.48 vs. $1.33 expected.
  • Adjusted revenue: $12.29 billion, excluding refinery sales, vs. $12.23 billion expected.

The airline generated $13.44 billion in total sales for the final three months of 2022, 17% higher than the $11.44 billion it brought in three years earlier.

High costs ate away at some of Delta’s profits, but its net income still totaled $828 million, down from $1.1 billion in the same three-month period of 2019, but on 9% less flying than three years earlier. It was a sign of travelers’ willingness to continue booking, even at high fares, which more than made up for the higher expenses.

Delta’s operating costs rose 19% in the fourth quarter from 2019, including a $2.8 billion fuel bill, up 42% from a year ago.

Delta CEO Ed Bastian said in a news release the carrier “rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance.”

Airlines have largely been upbeat about the fourth quarter, despite concerns about a recession and weakness from some retailers and other businesses. On Thursday, American Airlines hiked its revenue and profit forecast for the period, sparking a broad rally in the sector.

That was even after severe winter weather disrupted flights coast to coast over the year-end holidays, prompting mass cancellations. Southwest Airlines in particular struggled to recover and said its meltdown could cost it more than $800 million. American and Southwest report on Jan. 26.

This is breaking news. Check back for updates.

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