10/1/2014

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Business

Delta Air Lines posts profit of $1.37 billion

Delta Air Lines posts profit of $1.37 billion
A Delta Air Lines aircraft takes off at Miami International Airport.
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MINNEAPOLIS (AP) - Delta Air Lines made more than a billion dollars in the third quarter as more passengers paid a little bit extra to fly. Even its new oil refinery turned a small profit.

The airline is seeing strong holiday bookings, and the "revenue environment appears solid through the end of the year," President Ed Bastian said in a statement.

Delta's net income jumped 31 percent to $1.37 billion, or $1.59 per share. Not counting gains from fuel hedges, the company would have earned $1.2 billion, or $1.41 per share. That was 5 cents per share more than expected by analysts surveyed by FactSet.

A year ago it earned $1.05 billion, or $1.23 per share.

Revenue rose 6 percent to $10.49 billion, about what analysts were expecting.

Delta shares rose 4 percent, to $25.65, in premarket trading.

Traffic rose 2 percent for the quarter. The amount passengers paid for each seat flown one mile rose almost 5 percent. It said flying capacity would rise 1 percent to 3 percent in the fourth quarter. Delta is second only to United Airlines in passenger traffic among the world's airlines.

Delta, based in Atlanta, saw passenger revenue gains in domestic flying and flying to Europe. Revenue for flights across the Pacific fell 5 percent. The weaker Japanese yen has made Asia flying less profitable for Delta as well as United. Those two have the biggest share of Asia flights among U.S. airlines.

Last year Delta bought an oil refinery near Philadelphia, and has maximized its jet fuel output. It took longer than Delta had predicted, but the refinery turned its first profit in the most recent quarter, $3 million. It lost $136 million total during the three previous quarters. Delta said profits there were hurt by smaller spreads between the cost of crude oil and the selling price of fuel.

The same tighter margins reduced jet fuel prices for Delta, the airline said. Its cost for jet fuel fell 5 percent to $2.97 per gallon.

Delta Air Lines Inc. began paying a dividend during the quarter.
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