Delta Air Lines expects to be pre-tax profitable in fiscal Q3

Delta Air Lines Inc (NYSE: DAL) said on Wednesday its revenue tanked less than expected in the fiscal second quarter resulting in a narrower loss than analysts’ forecast. The air carrier attributed upbeat performance to a returning demand for air travel after an unprecedented hit from the COVID-19 pandemic.

Financial performance

Delta reported $652 million of net income that translates to $1.02 per share. In Q2 of last year, its net income stood at a much higher $1.44 billion or $2.21 per share. Adjusted for one-time items, the airline lost $1.07 per share versus the year-ago figure of $2.35 of per-share earnings.

Delta generated $7.13 billion of revenue in the recent quarter that represents a 43% annualised growth. According to FactSet, experts had forecast the company to post $6.20 billion of revenue and $1.38 of per-share loss.

Other notable figures in Delta’s earnings report include a 53% decline in passenger revenue that still beat expectations. Load factor slipped from 88% to 69% versus 69.8% expected. Compared to the pre-pandemic levels (2019), the air carrier expects its total revenue to keep 30% to 35% down in the third quarter.

CEO Ed Bastian discusses earnings on CNBC’s “Squawk Box”

Delta Air Lines was pre-tax profitable in June and expects the same for Q3 and the back half of fiscal 2021 at large. CEO Ed Bastian also expresses confidence that the Atlanta-based company will be free cash flow positive in the current quarter. In his interview with CNBC’s “Squawk Box”, he said:

According to Bastian, the delta variant has so far not weighed on demand at all. Delta’s recent survey reported about 95% of its customers expect to be back to their offices by the end of 2021 – an indication that business travel was likely to jump further in the upcoming months.