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Delta Airlines
Inc.
DAL -2.26%
The third-quarter sales increase almost offset the surge in jet fuel prices that weigh on US carriers.
The US No. 2 trader said that the 8% increase in sales was due to strong demand and soaring premium sales, helping to cope with rising consumer prices. fuel costs and the disruption caused by Hurricane Florence in September. Earnings rose 13% to $ 1.3 billion.
The Delta action rose 3% to $ 51.20 in pre-market trading on Thursday.
Delta, the first major US airline to release its results for the third quarter, pointed out that soaring fuel prices remained a threat to the profitability of the industry despite the strong demand for air travel.
The Atlanta-based carrier's fuel bill increased by $ 655 million, but Delta said it was able to offset 85 percent of that increase. Other unit costs remained stable.
Chief Executive Officer Ed Bastian said the airline was about to increase its revenue and profit margins next year.
Delta has not proposed a 2019 outlook or a revised forecast for all of 2018. A spokesperson said Delta is expected to earn between $ 5.35 and $ 5.70 for all of 2018 as planned previously.
It was not clear if Delta hoped to reduce the growth of its capabilities to increase profits, as previously telegraphed. According to Delta, capacity growth in the fourth quarter would be about 4%. The carrier said previously that it would increase its capacity by 3% over the entire 2018.
With a market value of $ 34 billion, Delta is the largest US airline on Wall Street. His stock is down 11% so far this year, fending off better than his rival
American Airlines Group
Inc.
whose stock is down 39%.
United Continental Holdings
Inc.
is up 17% this year.
Investors are keeping a close eye on how US carriers are reducing their plans for adding flights this year, as fuel costs are rising faster than airlines can increase their fares and baggage fees.
In total for the quarter, Delta reported earnings per share of $ 1.91, up from $ 1.61 in the same quarter last year.
On an adjusted basis, the company reported a profit of $ 1.80. Analysts surveyed by FactSet predicted the carrier would release adjusted earnings of $ 1.74 per share.
Total revenue reached a record $ 12 billion, up 8%. Delta's tightly supervised unit revenues increased by 4.3%.
Hurricane Florence resulted in a $ 30 million loss in Delta's third quarter results.
As Hurricane Michael struck the southeastern United States, Delta announced that it had canceled nearly 80 flights due to Wednesday's storm, but was not expecting to disturbances on its hub in Atlanta.
-Micah Maidenberg contributed to this article.
Write to Andrew Tangel at [email protected]
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