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Delta Air Lines (NYSE:DAL) slid on Thursday after rattling investors with cautious guidance.
Revenue was up 7.2% year-over-year to a record tally for the quarter of $16.7 billion. Premium revenue increased 10%, with premium unit revenues positive year-over-year. Loyalty revenue was up 8%, driven by co-brand spend growth and an increasing premium card mix. Corporate travel demand was noted to have grown at double-digit levels. Total revenue per available seat mile was down 1% to $0.2231. The Cost per available seat mile metric was up 2% to $0.1928.
The airline company also generated adjusted operating income of $2.3 billion, an operating margin of 14.7%, and operating cash flow of $2.5 billion. However, net income was down 30% from a year ago.
On the balance sheet, Delta (DAL) delivered $2.7 billion of free cash flow in the first half of the year, enabling $2.1 billion in debt repayment and a 50% increase in the company’s quarterly dividend beginning in the September quarter. Adjusted net debt at the end of the quarter was down $2.3 billion to $19.2 billion.
Delta Air Lines (DAL) sees Q2 EPS of $1.70 to $2.00 vs. $2.05 consensus, and full-year adjusted EPS of $6.00 to $7.00 vs. $6.60 consensus. Free cash flow of $3 billion to $4 billion is also anticipated. During a media appearance, Delta Air Lines (DAL) CEO said lower fare discounting was impacting the company.
Shares of Delta Air Lines (DAL) were down 8.62% in premarket action on Thursday. Within the airline sector, United Airlines (UAL) moved down 3.92% and American Airlines Group (AAL) shed 4.13%. Southwest Airlines (LUV) fell 2.47% and JetBlue (JBLU) moved 1.92% lower in the early session.