Delta’s guidance comes up short as rising fuel costs weigh

source
Reuters/Tami Chappell

Delta Air Lines reported better-than-expected second-quarter results Wednesday morning, but guided earnings below Wall Street estimates because of rising fuel costs. Shares were up about 1% in early trading on Thursday.

The US’s number two carrier earned an adjusted $1.77 a share on record revenue of $11.8 billion. Those numbers were ahead of the respective $1.72 and $11.7 billion that Wall analysts surveyed by Bloomberg were expecting. Delta says its pre-tax income of $1.6 billion was hampered by a $600 million impact from higher fuel prices.

“With an expected $2 billion higher fuel bill for 2018, we are now forecasting our full-year earnings to be $5.35 to $5.70 per share, CEO Ed Bastian said in the earnings report. That forecast is below the $5.74 a share expected by the Bloomberg consensus. Delta sees fuel its fuel price in a range between $2.32 and $2.37 in the third quarter, and $2.20 to $2.30 for the full year.

The airline’s board of directors declared a dividend of $0.35 a share, up 15% from the prior quarter.

Shares of Delta were down 11% this year through Wednesday.

Delta Air Lines

source
Markets Insider