Delta Air Lines Posts Revenue that Beats

Delta Air Lines posted revenue and earnings for its third quarter that beat expectations on Wall Street, but warned that higher costs were on the horizon for the fourth quarter of 2017.

Delta’s posted a net income just over $1.8 billion equal to $1.64 per share for the three months ending in September.

The largest airline in the U.S. by market capitalization announced that its adjusted earnings per share reached $1.57, which beat estimates on Wall Street of $1.53 per share for its quarter that ended with operations crippled by hurricanes.

Shares at Delta were up over 1.7% during Wednesday premarket trading.

The adjusted per share earnings at Delta were nearly 8% less than during the same period one year ago. The airline announced that its revenue was $11.05 billion or just higher than Wall Street expectations of $11.03 billion for the three month period and 6% higher than the same period one year ago.

Passenger revenue per seat mile at Delta, which is an important metric for income, increased by 1.9% which was in line with the updated forecast by the airline in early September.

It announced that it is expecting between a 2% and 4% increase in passenger unit revenue for its fourth quarter. However, it warned that fuel costs were higher and would likely hurt operating margins for the quarter that ends the year.

Higher revenue was posted by Delta for domestic, trans-Atlantic and Latin American operations, despite the powerful storms across the southern U.S. during the months of August and September.

Airline stocks move higher on Tuesday following the announcement by Delta’s competitors American Airlines and United Airlines issuing better than had been expected estimates for the quarter.

Forecasts for domestic competitors of Delta are pointing to lower earnings for the quarter, as airlines battle with how to increase profits with continuing low air fares and high fuel and labor costs.

The U.S. Department of Commerce has recommended trade duties of close to 300% on the C-Series jets from Bombardier, after U.S. airplane maker Boeing complained its competitor based in Canada received subsidies and sold its jets at less than costs of production.

Delta agreed last year to purchase 75 or more of the 100-seat planes.

Ed Bastian the CEO at Delta said the price was great it received for the planes but did not disclose what that price was. Last month Bastian called the decision by the Commerce Department absurd saying Boeing does not make a comparable product any longer.

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