Seeking Alpha

Strong guidance boosting Delta

  • Q2 operating revenue of $914M up 9% Y/Y, with traffic up 5% and capacity up 3.2%.
  • Operating margin (ex special items) rose to 15.1% and the September quarter is expected to even better, with management guiding to 15-17%.
  • Free cash flow of $1.5B during the quarter. Capital returned to shareholders through dividends and share repurchases totals $550 YTD. Adjusted net debt is cut below $8B and more than $900M has been contributed to pension plans.
  • Previously: Delta Air beats by $0.01, misses on revenue
  • DAL +2.2% premarket

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Comments (3)
  • Pony01
    , contributor
    Comments (282) | Send Message
     
    Two strong quarters compared to previous quarters. Anderson said on CNBC that the third quarter will be even stronger. He also mentioned DAL purchased a "Jones Act" tanker to tank WTI crude to the Trainer Refinery. That's the first I've heard of that. DAL had a fuel cost in Q2 of $2.93 per gallon (lowest in the industry) and Trainer was revenue positive. With a 5 year contract to receive 65K barrels a day of Bakken crude at Trainer, the new tanker, and upgrades at Trainer to produce more jet fuel I see a lower fuel cost compared to the industry in the future. A 1 cent decrease in fuel cost is a 10 million dollar decrease in variable cost. It also should be noted, with Trainer producing a profit, that further offsets the fuel cost - although it can't be accounted for like that with GAAP rules.
    23 Jul 2014, 11:02 AM Reply Like
  • starcorral
    , contributor
    Comments (765) | Send Message
     
    Delta is a rare bird. Setting aside all else including how much my investment has grown, I must say it is an honor to own a company that does so well in its field of expertise. It owns an oil refinery and helps mitigate fuel costs while running flawlessly near capacity. Delta is constantly improving the customer and public relations in the air and on the ground as a benefactor of countless projects and funds. They are perceived well everywhere. Delta was a winner at $14.00. It remains one of the best companies on the map.
    23 Jul 2014, 02:33 PM Reply Like
  • Day Trader001
    , contributor
    Comments (771) | Send Message
     
    Star,
    Excellent comment, fully agree... DAL & AAL are the best plays in this sector. Both will be long & strong!
    24 Jul 2014, 09:23 AM Reply Like
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