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Delta’s profits jump 3.3% in 4th quarter

Increase exceeds expectations for 3rd-largest airline

SHARE Delta’s profits jump 3.3% in 4th quarter

ATLANTA — Delta Air Lines Inc.'s fiscal fourth-quarter profits rose 3.3 percent, exceeding forecasts as the third-largest U.S. airline carried more passengers and kept rising fuel costs in check.

Profits from operations rose to $376 million, or $2.86 a share, in the quarter ended June 30 from $364 million, or $2.40, a year earlier. Delta was forecast to earn $2.72 a share, the average forecast in a First Call/Thomson Financial analyst poll. Sales rose 14 percent to $4.47 billion from $3.96 billion.

The Atlanta-based airline's passenger traffic climbed 7.1 percent as average revenue per passenger declined less than half a percent. The biggest U.S. transatlantic carrier benefited from greater demand for travel in the United States as well as to Europe.

The European air travel market is "just a very strong revenue environment," said Merrill Lynch analyst Candace Browning, who has a "strong buy" rating on Delta.

The strong U.S. economy and U.S. dollar are leading more Americans to travel to Europe, while improving economies in Europe generate more visitors to the United States too, she said.

Delta rose 1/4 to 53 7/8. Delta and other major airlines fell Thursday after the biggest carrier, UAL Corp.'s United Airlines, said third-quarter and full-year earnings wouldn't meet forecasts. Investors worried that some carriers' increased traffic this quarter was a temporary benefit from United's service problems.

Chief Financial Officer Ed West said he doesn't foresee the demand abating, with U.S. ticket bookings for the current quarter higher than they were at this point last year and international bookings about the same.

"We still see signs of a solid economy here ahead of us," West said during a conference call with analysts.