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Delta Air Lines Non-GAAP EPS of $1.44 misses by $0.28, revenue of $13.8B beats by $400M

Jul. 13, 2022 6:36 AM ETDelta Air Lines, Inc. (DAL)By: Niloofer Shaikh, SA News Editor5 Comments
  • Delta Air Lines press release (NYSE:DAL): Q2 Non-GAAP EPS of $1.44 misses by $0.28.
  • Revenue of $13.8B (+93.5% Y/Y) beats by $400M.
  • Adjusted Revenue of $12.31B vs. consensus of $12.33B.
  • The company is on track to achieve 2024 targets of

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Comments (5)

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Although the post earnings selloff seems a bit extreme, the guidance was very weak. Hopefully, management is sandbagging.

They are projecting revenue to be down 6.5% from Q2, despite a 2.5% increase in capacity. This implies airfare prices will be down 9%. And yet they are projecting operating margin expanding by 9%. While fuel is projected to come down by 8%, all other operating costs would need to come down by 15-20% to increase margin while fare pricing is expected to drop.

The numbers are difficult to reconcile at a macro level, but perhaps Q2 contained significant one-time costs associated with paying off oversold seats and service disruptions in general.
Very solid results despite high oil prices. The stock however is trading like it just announced bankruptcy.
Tim Dunn profile picture
As expected, Delta delivered a strong result that will put them back in the postiion as the most profitable airline in the world and they delivered on the strategies that I laid out in this article


Revenue is recovering very nicely esp. in international markets but costs bit more than expected, partly due to fuel and partly due to lower volume due to operational challenges - but partly due to non-fuel inflation.
The refinery is generating a positive result worth hundreds of millions of dollars per quarter which, added to Delta's improved fuel efficiency, will save the company $1.5 to 2 billion in fuel per year.

Given that many are expecting DAL's results to speak to not just the rest of the airline industry but also the general economy, the theme is that demand is back where people can freely travel - only a few countries in Asia are practically still off the table. People are traveling in large numbers and paying good money for their travel but Delta is also generating strong revenues from non-transportation sources.
Other companies will not have the huge return of pent up demand that airlines are experiencing right now which gives airlines an advantage.
As the rest of the industry reports its results, it is doubtful that anyone anywhere will beat Delta's results or its guidance
@Tim Dunn Why do you think DAL’s stock performance is below that of it’s legacy peers in 2022, despite generally believed to be the best performer and having a fuel cost advantage? And it’s not even close.
Tim Dunn profile picture
Delta is almost always the first to report and gets hit disproportionately harder when they miss their estimate.

Given that the miss was heavily due to fuel price hikes in the month of June - Delta gave its last guidance on June 1 - it is a given that other airlines will also have significant fuel increases since their last guidance. The difference is that AAL UAL JBLU SAVE and others have no active fuel cost reduction strategies such as hedging or the refinery strategy which DAL has.
It will all equalize shortly after the earnings season ends.

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