Delta Air Lines Inc. (DAL) experienced a surge in its stock price as it reached a more-than two-year high following the release of its second-quarter financial results. The company reported higher-than-expected profit and revenue, along with an optimistic outlook for the remainder of the year.
Impressive Financial Results
Delta’s net income more than doubled from the previous year, reaching $1.83 billion, or $2.84 per share, compared to $735 million, or $1.15 per share, in the same period last year. Adjusted earnings per share stood at $2.68, outperforming the FactSet consensus of $2.40.
Furthermore, Delta’s revenue grew by 12.7% to $15.78 billion, surpassing the FactSet consensus of $14.44 billion.
Positive Outlook for the Future
For 2023, Delta Air Lines has raised its earnings per share guidance range to $6 to $7, up from $5 to $6. Additionally, the company increased its outlook for free cash flow from $2 billion to $3 billion.
Strong Demand and Operational Performance
Delta’s CEO, Ed Bastian, emphasized the robust demand for air travel among consumers. The company experienced an 18.0% increase in traffic, measured by revenue passenger miles, and a 17.1% growth in capacity, measured by available seat miles. The load factor also improved by one percentage point to 88%, surpassing the FactSet consensus of 87.2%.
Positive Stock Performance
Delta Air Lines’ stock price rose by 3.5% in premarket trading, indicating that it could open at its highest price since April 2021 during regular trading hours. Over the past three months, Delta’s stock has seen a significant increase of 42.1%, outperforming the U.S. Global Jets exchange-traded fund (JETS), which rose by 22.1%, and the S&P 500 index, which gained 9.3%.
Delta Air Lines’ strong financial performance and positive outlook demonstrate its resilience amid the ongoing travel demand recovery. With robust consumer demand and improved operational performance, the company is well-positioned for future growth.
