Ed Bastian, CEO of Delta Airlines, speaking on CNBC’s Power Lunch on December 17, 2024.
Adam Jeffery | CNBC
Delta Air Lines‘ outlook for the first quarter on Friday beat analysts’ expectations as the carrier forecast strong demand for travel at the start of the year, which CEO Ed Bastian said was likely to be the carrier’s best ever.
Delta said it expects to generate more than $4 billion in free cash this year, up 18% from 2024 and in the middle of its annual target of between $3 billion and $5 billion. For the full year, it expects annual adjusted earnings of more than $7.35 per share.
“We feel good going into the new year,” Bastian told CNBC. “Everywhere we see that consumers continue to prioritize experience over goods.”
That’s setting Delta up for “our best financial year in our history,” Bastian added.
Here’s how the company performed in the three months ended Dec. 31 compared to Wall Street expectations based on LSEG consensus estimates:
- Earnings per share: $1.85 adjusted vs $1.75 expected
- Income: $14.44 billion adjusted vs. $14.18 billion expected
Delta said it expects revenue growth of 7% to 9%, ahead of the roughly 5% growth forecast by analysts polled by LSEG. The carrier expects first-quarter earnings of between 70 cents and $1, slightly higher than Wall Street forecasts of between 65 cents and 97 cents.
The Atlanta-based airline is the first major US airline to report earnings this quarter. Carriers are enjoying strong post-pandemic travel demand, which analysts say is likely to continue this year, with several deals with by the way for consumers.
Delta said it capitalized on the trend toward premium travel because more and more customers are shelling out for more spacious seats or rewards credit cards.
It’s Delta American Express the partnership brought in $2 billion in the fourth quarter, up 14% year-over-year. Revenue from premium seats, such as first class and premium economy, rose 8% in the fourth quarter to $5.2 billion, compared with a 2% rise in main cabin ticket revenue to about $6 billion.
Unit revenue, a measure of how much revenue an airline brings in for how many flights, rose 4% in the fourth quarter from 2023.
Delta’s profit fell 59% to $843 million in the final three months of the year from the same period in 2023 as costs, including wages, rose 7%, or $942 million. Revenues rose 9% to $15.6 billion from a year earlier.
Adjusted for one-time items, Delta reported fourth-quarter earnings per share of $1.85 on adjusted revenue of $14.44 billion, both of which topped analysts’ estimates.
