- Delta Air Lines, Inc. DAL reported a second-quarter FY22 adjusted operating revenue decline of 1% from 1Q19 to $12.31 billion. GAAP operating revenue was $13.82 billion, a growth of 10% from 1Q19. Analysts expected the company to report revenues of $13.40 billion.
- Adjusted EPS was $1.44 below the consensus of $1.64.
- Operating revenue was 99% recovered versus June quarter 2019 on 82% capacity restoration.
- Domestic passenger revenue was 3% higher, and international passenger revenue was 81% recovered compared to the June quarter of 2019.
- Total passenger revenue was $10.96 billion, a decline of 4% from 2Q19. Cargo revenue increased by 46% to $272 million compared to 2Q19.
- Delta recorded an adjusted operating income of $1.45 billion, compared to $2.14 billion in 2Q19, and the operating margin was 11.7%, down by 550 bps.
- Total Non-GAAP operating expenses increased by 5% from 2Q19 to $10.87 billion in the quarter.
- Delta Air Lines generated an operating cash flow of $2.5 billion, compared to $3.27 billion in 2Q19. Adjusted free cash flow was $1.61 billion for the quarter.
- Delta ended the June quarter with $13.6 billion in liquidity, including $2.8 billion in undrawn revolver capacity.
- Total revenue per available seat mile increased by 34% from 2Q19 and increased 20.5% on an adjusted basis. The passenger load factor was 87% vs. 88% in 2Q19.
- Compared to 2Q19, CASM-Ex was 22% higher on 18% less capacity.
- Adjusted fuel price of $3.82 per gallon was up 37% sequentially. Compared to the June quarter of 2019, market prices were up 94%.
- 3Q22 Outlook (compared to Q3 2019): Delta Air Lines expects total revenue to be up 1%-5%, capital expenditures to be ~$1.8 billion, and adjusted net debt of ~$20 billion.
- DAL expects an adjusted operating margin of 11% – 13%.
- Price Action: DAL shares are trading lower by 6.56% at $29.05 during the premarket session on Wednesday.
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