GuruFocus –
- Pretax Profit (December Quarter): $1.6 billion.
- Earnings Per Share (December Quarter): $1.85.
- Operating Margin (December Quarter): 12%.
- Full Year Revenue: $57 billion.
- Full Year Earnings Per Share: $6.16.
- Return on Invested Capital: 13%.
- Free Cash Flow (Full Year): $3.4 billion.
- Debt Repayment (Full Year): $4 billion.
- Revenue (December Quarter): $14.4 billion.
- American Express (NYSE:) Remuneration (December Quarter): Nearly $2 billion.
- American Express Remuneration (Full Year): Approximately $7.4 billion.
- Operating Cash Flow (Full Year): $8 billion.
- Capacity Growth (2025): 3% to 4%.
- Expected Earnings Per Share (2025): Greater than $7.35.
- Expected Free Cash Flow (2025): Over $4 billion.
Release Date: January 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Delta Air Lines Inc (NYSE:NYSE:) reported a record December quarter pretax profit of $1.6 billion, marking the largest December quarter profit in its history.
- The company achieved industry-leading operational performance with the number one system completion factor and on-time performance among peers.
- Delta Air Lines Inc (NYSE:DAL) was recognized for the fourth consecutive year with Cirium’s Platinum Award for operational excellence.
- The company expects to generate over $4 billion of free cash flow in 2025, supporting further debt reduction.
- Delta Air Lines Inc (NYSE:DAL) announced a 50% increase in its quarterly dividend during the year, reflecting strong cash generation.
Negative Points
- Delta Air Lines Inc (NYSE:DAL) faces risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
- The company experienced a $0.45 impact on earnings per share due to the CrowdStrike (NASDAQ:) caused outage in the September quarter.
- Delta Air Lines Inc (NYSE:DAL) anticipates non-fuel unit cost growth in the March quarter to be up low single digits year-over-year.
- The company is still facing challenges in normalizing maintenance expenses, which are expected to improve over multiple years.
- Delta Air Lines Inc (NYSE:DAL) is dealing with the impact of wildfires in Southern California, which has affected sales in the Los Angeles region.
Q & A Highlights Q: Can you elaborate on the greater than $735 million full-year guide and potential revenue upside?
A: Daniel Janki, CFO, explained that the forecast focuses on controllable factors like capacity, premium revenue growth, and efficiencies. The industry backdrop, especially in the main cabin, could provide additional margin upside as the year progresses.
Q: Which geographic entity showed the most improvement in the fourth quarter, and how does this affect 2025 capacity allocation?
A: Glen Hauenstein, President, highlighted the transatlantic region’s outstanding performance, driven by strong US-origin travel and favorable currency exchange rates. This strength informs a positive outlook for capacity allocation in 2025.
Q: How does Delta plan to monetize SkyMiles with new partnerships like Sync and Uber?
A: CEO Ed Bastian stated that the focus is on enhancing customer experience and loyalty rather than immediate monetization. The partnerships aim to increase the value of SkyMiles membership and deepen customer loyalty.
Q: What are the levers for keeping CASM low single digits in 2025?
A: Daniel Janki, CFO, mentioned better utilization of assets, growth in high-margin core hubs, and improved maintenance efficiency as key factors. The company is also leveraging technology for long-term efficiency gains.
Q: How is corporate travel behavior evolving post-COVID, and is it reverting to pre-COVID patterns?
A: Glen Hauenstein noted that while corporate travel behavior is reverting on the margin, it remains different from pre-COVID patterns. Booking (NASDAQ:) curves have shortened, and Tuesday and Wednesday travel is increasing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
