Delta Airlines (DAL) earnings in the first quarter of 2023

An Airbus A330neo wide-body aircraft intended for Delta Airlines being tested in Toulouse, France.

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Delta Airlines posted a larger loss than it had previously estimated For the first three months of the year, but forecasts for revenue and profit growth for the second quarter were higher than analyst estimates, indicating strong travel demand despite weakness in other sectors.

The Atlanta-based carrier said it expects sales to increase in the current quarter by 15% to 17% over last year, with adjusted operating margins of up to 16% and adjusted earnings per share of between $2 to $2.25. Analysts surveyed by Refinitiv expected second-quarter revenue growth of 14.7% and earnings per share of $1.66. The airline predicted “record bookings for the summer.”

Delta said it plans to increase its production capacity by 17% in the second quarter compared to a year earlier.

But for the first quarter, adjusted revenue and adjusted earnings came in below analyst estimates. Unit costs, excluding fuel, were up 4.7% year over year, in part because winter storms grounded flights.

US airlines generally generate the bulk of their revenue during the busy spring and summer travel season, and Delta’s outlook points to more strength in travel demand, and its strong pricing power. Delta is the first US airline to report earnings. United Airlines will report on Tuesday, and American Airlines and Southwest Airlines will follow the following week.

Delta said its corporate bookings are recovering, as domestic sales in March returned 85% to 2019 levels. Delta said it also got a boost in its loyalty program, as its co-branded credit card partnership with American Express contributed $1.7 billion. dollars in the most recent quarter, up 38% from a year ago.

The airline said sales from luxury cabins such as first class outpaced revenues from regular buses.

Delta shares rose more than 4% in pre-market trading.

Here’s how delta performs in the period, Ending March 31stcompared to the Wall Street forecast based on Refinitiv consensus estimates:

• Adjusted earnings per share: 25 cents versus an expected 30 cents.
• Adjusted revenue: 11.84 billion dollars, compared to the expected 11.99 billion dollars.

In the first quarter, Delta posted a net loss of $363 million, or 57 cents per share, citing in part a new four-year trial contract that includes increases of 34%. That’s still an improvement over the same period last year, when travel demand was still recovering and the company posted a net loss of $940 million, or $1.48 per share.

Adjusting for one-time items, the company reported net income of $163 million, or 25 cents per share, up from a loss of $748 million, or $1.23 per share, during the first quarter of 2022.

Delta executives will hold an analyst call to discuss results at 10 a.m