Money burned cut in half

Delta Air Lines halved its cash consumption and cut losses in the fourth quarter as the coronavirus pandemic led the carrier to its worst year in history, the company said Thursday.

The Atlanta-based airline posted a net loss of nearly $ 12.39 billion in 2020, a record high, according to FactSet data.

Here’s how Delta performed compared to what Wall Street expected, based on average estimates compiled by Refinitiv:

• Adjusted EPS: a loss of $ 2.53 vs. an expected loss of $ 2.50
• Total revenue: $ 3.97 billion, adjusted to negate refinery sales of $ 3.53 billion

Delta fell to a net loss of $ 755 million in the fourth quarter, from a profit of $ 1.1 billion a year earlier. Total revenue fell 65%, from $ 11.44 billion in the fourth quarter of 2019 to $ 3.97 billion. The company’s revenues were increased by $ 441 million from sales of refineries to third parties. On an adjusted basis, Delta recorded a loss per share of $ 2.53, compared to analysts’ estimates for a loss of $ 2.50 per share.

The carrier’s cash consumption averaged $ 12 million per day in the quarter ended Dec.31, down by half from its average consumption of $ 24 million per day in the third quarter. Delta said it expects to achieve positive cash flow by the spring.

Delta shares rose more than 2% in pre-market trading after Delta released its results.

The airline will face difficult months ahead, but is eyeing a recovery in 2021 as Covid-19 vaccines are administered across the country, CEO Ed Bastian said.

“While our challenges continue into 2021, I am optimistic that this will be a year of recovery and a turning point that will allow an even stronger Delta to regain revenue growth, profitability and free cash generation,” said Bastian.

Delta said it expects revenues to fall 60% to 65% in the first quarter of the year, compared to the previous year, just as the pandemic was starting. That’s below analysts’ estimates for a 48% year-over-year drop.

The pandemic has devastated travel demand as concerns about the virus, quarantines, travel restrictions and breaks on business trips have held millions of potential customers home. The Transportation Security Administration only screened 324 million travelers last year, up from 824 million in 2019.

Airlines executives hoped the vaccine rollout would provide some relief, but have repeatedly warned that it will not be immediate.

“The start of the year will be characterized by an unstable recovery in demand and a reservation curve that remains compressed, followed by an inflection point, and finally a sustained recovery in demand as customer confidence improves. the scale, vaccinations become widespread and offices reopen, “Delta Chairman Glen Hauenstein said in a press release.

Delta said it ended the fourth quarter with $ 16.7 billion in cash. Delta raised billions in debt last year, including a record $ 9 billion debt sale backed by its SkyMiles loyalty program.

The carrier and its rivals are also receiving additional federal funds to help weather the crisis. Late last year, Congress approved an additional $ 15 billion in federal aid for airlines to pay workers, on top of the additional $ 25 billion in government payroll support they received under the CARES Act of March.