Delta Air Lines (NYSE:DAL) 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 labour 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.
Adjusted earnings per share came in at $1.48 vs. $1.33 expected.
Adjusted revenue was $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.
Said CEO Ed Bastian,"As we move into 2023, the industry backdrop for air travel remains favorable and Delta is well positioned to deliver significant earnings and free cash flow growth. We expect to grow 2023 revenue by 15 to 20 percent and improve unit costs year-over-year, supporting a full-year outlook for earnings of $5 to $6 per share and keeping us on track to achieve more than $7 of earnings per share in 2024."
DAL shares $1.73, or 4.4%, to $37.87.
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