Reports GAAP quarterly profit of $19 million and annual profit of $593 million
an 18, 2011
ATLANTA, Jan. 18, 2011 /PRNewswire/ — Delta Air Lines (NYSE: DAL) today reported financial results for the December 2010 quarter. Key points include:
- Delta’s net income for the December 2010 quarter was $158 million, or $0.19 per diluted share, excluding special items(1). This is a $383 million improvement year over year.
- Delta’s GAAP net income was $19 million, or $0.02 per diluted share, for the December 2010 quarter.
- Delta’s net income for 2010 was $1.4 billion, excluding special items. Including $851 million in special items, Delta’s net income for 2010 was $593 million.
- 2010 results include $313 million in profit sharing expense, including $38 million in the December quarter, in recognition of Delta employees’ achievements toward meeting the company’s financial targets.
- Delta’s adjusted net debt at the end of 2010 was $15.0 billion, a $2.0 billion reduction from prior year.
- Delta ended 2010 with $5.2 billion in unrestricted liquidity.
“Our 2010 results are among the best in Delta’s history. They would not have been possible without the dedication and determination of Delta employees worldwide and we are pleased we will pay more than $300 million in profit sharing for 2010,” said Richard Anderson, Delta’s chief executive officer. “These results are a direct reflection of the success of our merger, cost discipline and debt reduction strategy and give us momentum to deal with the rising fuel prices we face in 2011.”
Revenue Environment
Total operating revenue for the December 2010 quarter was $7.8 billion, an increase of $1.0 billion, or 14%, compared to the same period last year.
- Passenger revenue increased 15%, or $889 million, compared to the prior year period on 7% higher capacity. Passenger unit revenue (PRASM) increased 8%, driven by a 9% improvement in yield.
- Cargo revenue decreased 7%, or $17 million, due to the elimination of freighter operations, partially offset by higher volume and yield.
- Other, net revenue increased 14%, or $112 million, primarily due to higher SkyMiles revenue and revenues from ancillary products and services.
“Through the momentum we built in 2010, we expect to maintain our March quarter margins year over year despite more than $350 million in higher costs from the recent steep run-up in fuel prices,” said Ed Bastian, Delta’s president. “Industry-wide fare increases, combined with growth in Delta’s ancillary products and services, will provide a more long-term, revenue-based solution to addressing the high fuel environment.”
Cost Performance
In the December 2010 quarter, operating expense increased $644 million year over year due to higher fuel price, volume- and revenue-related expenses, and profit sharing expense, which were partially offset by incremental merger cost synergies.
Consolidated unit cost (CASM[2]), excluding fuel, profit sharing and special items, decreased 2% in the December 2010 quarter on a year-over-year basis, on 7% higher capacity. Consolidated CASM, including fuel, profit sharing and special items, increased 2%.
Non-operating expense excluding special items decreased $67 million due to benefits from Delta’s debt reduction initiatives. Including special items, non-operating expense was $36 million lower than in the December 2009 quarter.
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