Proactiveinvestors recommends
Additional Information
Market:ASX
Sector:General Mining
EPIC:.
Proactive Investors Australia

Proactive Investors is a leading financial and investor website and platform, dominating the "Small-Mid Cap" investor space with multiple investor "channels" and "touch-points."

 

Proactive Investors Australia is a part of the largest global financial investor network with offices in Australia, Europe, Asia and North America. 

From the U.S., Delta Air Lines and US Airways Q4 profits beat estimates despite higher fuel costs

Thursday, January 26, 2012 by Proactive Investors
From the U.S., Delta Air Lines and US Airways Q4 profits beat estimates despite higher fuel costs

Delta Air Lines (NYSE:DAL) and US Airways Group (NYSE:LCC) posted fourth-quarter earnings that beat estimates as higher fares helped offset an increase in fuel costs.

For the quarter that ended December 31, Delta said adjusted earnings came in at $379 million, or 45 cents per share, on revenue which grew eight percent to $8.4 billion.

Analysts polled by FactSet Research expected 37 cents per share of earnings, on revenue of $8.32 billion.

The US carrier raised its prices during the critical holiday season while reducing flying to keep costs low. The money it made to fly a passenger a single mile rose 12 percent due to higher fares.

Fuel expenses rose five percent in the quarter, while other costs were flat. Delta consumed less fuel in the quarter, but average fuel prices shot up about 20 percent.

Delta's chief executive officer, Richard Anderson, said: "Delta people pulled together in 2011 to produce a solid profit, strong cash generation, and the best operational performance in the industry for our customers.

"Looking forward to 2012, we will continue our commitment to sustained profitability and superior returns by growing and diversifying our revenues, while taking a disciplined approach to capacity, costs and capital spending."

Delta’s strategy of reducing flying to match demand will continue. The carrier said it will cut flying capacity between three to five percent during the first quarter of 2012.

Meanwhile, US Airways Group said that fourth-quarter net income fell 35 percent as rising passenger revenue wasn't enough to offset a steep increase in fuel prices, but the company still beat estimates by a wide margin.

For the quarter, earnings came in at $18 million, or 11 cents per share, compared with $28 million, or 17 cents per share, a year earlier.

Excluding charges, it earned 13 cents per share in the fourth quarter. Revenue rose nine percent to $3.16 billion.

Analysts surveyed by FactSet expected a profit of two cents per share, on revenue of $3.15 billion.

The money US Airways made to fly a passenger one mile in the fourth-quarter rose 9.9 percent to a record 15.2 cents, as the airline raised fares in an attempt to offset a $232 million increase in fuel costs.

US Airways expects passenger demand to remain strong going forward.

The carrier may be examining a potential merger with bankrupt American Airlines parent AMR Corp, according to press reports.

Wednesday morning, Delta shares were up eight percent to $10.13, while US Airways stock spiked 14 percent to $7.30.

 

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.