Delta Q1 revenue rises on strong demand across segments

Overview

• U.S. airline's Q1 revenue rose 9.4% yr/yr to a March quarter record

• Adjusted EPS for Q1 grew 44% yr/yr, driven by broad demand strength

• Company reduced adjusted net debt below 2019 levels, continued fleet modernization

Outlook

• Delta sees June qtr revenue up low-teens percent on flat capacity

• Company expects June qtr pre-tax profit of around $1 bln

• Delta forecasts June qtr EPS of $1.00-$1.50 and operating margin of 6%-8%

Result Drivers

• BROAD DEMAND - Co said record March qtr revenue was driven by strong demand across premium, corporate, and loyalty segments

• DIVERSIFIED REVENUE - Growth in high-margin revenue streams such as loyalty, MRO, and cargo contributed to results

• HIGHER FUEL AND COSTS - Higher fuel prices and non-fuel unit costs weighed on margins, partly offset by capacity reductions and fuel recapture actions

Company press release: ID:nPnv5mZda

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 26 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the airlines peer group is "buy"

• Wall Street's median 12-month price target for Delta Air Lines Inc is $80.00, about 21.9% above its April 7 closing price of $65.62

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 10 three months ago

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