Delta Air Lines beats by $0.05, reports revs in-line; sees Q4 PRASM down 3-5%; sees 4Q16, FY17 capacity +1%
- Reports Q3 (Sep) earnings of $1.70 per share, $0.05 better than the Capital IQ Consensus of $1.65; revenues fell 5.6% year/year to $10.48 bln vs the $10.5 bln Capital IQ Consensus, of which $100 million was due to the outage and $70 million was from prior year Yen hedge gains.
- Passenger unit revenues declined 6.8 percent, including nearly 2 points of impact from the outage and Yen hedges, on a 1.5 percent increase in capacity.
- Sees Q4 PRASM down 3-5% with operating margin 14-16%, capacity +1%, CASM +1-2%. For the December quarter, Delta is expecting a slight decline in margins year over year, as savings from lower fuel prices and productivity initiatives will be fully offset by declines in unit revenues that the company continues to address through its capacity actions and revenue management initiatives. The projections for the December quarter do not include any estimates for the company's potential agreement with its pilots.
- "While we were encouraged by our unit revenue trends through the September quarter, we have more work ahead of us to achieve our goal of positive unit revenues," said Glen Hauenstein, Delta's president. "With further slowing of our capacity growth in the December quarter and additional traction on our revenue management initiatives, we should make progress against that goal and we expect our December quarter unit revenues to decline by 3 -- 5 percent year over year."
- "With our focus on building a more sustainable and durable business, we will be taking a cautious approach to 2017 by keeping our capacity in line with the December quarter's 1 percent growth level."