01—Abstract
Summary
Summary of the 10-Q filed April 10, 2024. Cited figures are marked; the original filing is the authoritative source.
Delta Air Lines, Inc. reported net income of $37 milliona for the three months ended March 31, 2024, compared with a net loss of $363 million in the prior-year quarter.
Total operating revenue rose to $13.75 billionb from $12.76 billion, driven by a 7% increase in capacity and continued strength in travel demand across all regions, particularly for premium products. Operating income was $614 million versus an operating loss of $277 million a year earlier. The prior-year period included $864 million of one-time pilot agreement-related expenses, and the company noted that operating expense rose only 1%, with adjusted operating expense up 6%.
Cash generation was solid. Net cash provided by operating activities was $2.41 billionc, and free cash flow was $1.38 billion as defined by the company. Liquidity stood at $7.4 billion at quarter-end, including $2.9 billion undrawn under revolving credit facilities.
Total debt and finance leases were $18.13 billiond, down from $18.61 billion at December 31, 2023, after $712 million of debt repayments in the quarter. Delta paid a $0.10 per share quarterly dividend, totaling $64 million. The company's pre-tax results were weighed by $227 million of losses on investments, net, and $205 million of interest expense.
Management projects a 2024 effective tax rate of 23% to 25% and expects full-year 2024 capital spending of approximately $5.0 billion, excluding the LaGuardia terminal project. Aircraft purchase commitments totaled $20.7 billion at March 31, 2024.
02—Key points
Key Highlights
- Operating income of $614 million, compared with an operating loss of $277 million in the March 2023 quarter
- Net income of $37 million, or $0.06 per diluted share, versus a net loss of $363 million a year earlier
- Total operating revenue of $13.75 billion, up $989 million or 8%, on a 7% increase in capacity
- Operating cash flow of $2.41 billion and free cash flow of $1.38 billion for the quarter
- Liquidity of $7.4 billion at March 31, 2024, including $2.9 billion undrawn under revolving credit facilities
- Total debt and finance leases reduced to $18.13 billion from $18.61 billion at year-end 2023 after $712 million of repayments
- Aircraft purchase commitments of $20.7 billion at March 31, 2024, with an order for 20 A350-1000 aircraft placed in January 2024
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 10, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $13.75B$12.76B | +7.8% |
| Operating Expenses | $13.13B$13.04B | +0.8% |
| Operating Income | $614.00M-$277.00M | +321.7% |
| Net Income | $37.00M-$363.00M | +110.2% |
| EPS (Basic) | $0.06$-0.57 | +110.5% |
| EPS (Diluted) | $0.06$-0.57 | +110.5% |
| Shares Outstanding (Basic) | 640.00M639.00M | +0.2% |
| Shares Outstanding (Diluted) | 645.00M639.00M | +0.9% |
05—Questions
Frequently Asked Questions
What drove the improvement in Delta's operating results versus the prior-year quarter?
Revenue grew 8% on a 7% increase in capacity and strong demand, especially for premium products. Operating expense rose only 1% overall because the March 2023 quarter included $864 million of one-time pilot agreement-related expenses. Salaries and related costs increased $405 million on 5% pay increases and roughly 5,000 more employees.
How did the refinery segment perform?
Refinery operating income fell to $49 million from $222 million, which the filing attributes primarily to lower pricing. Third-party refinery sales rose $269 million to $1.19 billion on higher sales volume. The refinery's impact on the airline's average fuel price was a benefit of five cents per gallon, compared with 25 cents in the prior-year quarter.
What is Delta's capital return and debt reduction picture?
Delta paid a $0.10 per share quarterly dividend, totaling $64 million, and repaid $712 million of debt and finance lease obligations in the quarter. Total debt and finance leases declined to $18.13 billion from $18.61 billion at December 31, 2023. Moody's affirmed Delta's credit rating and revised its outlook to positive in February 2024.
What are the company's major forward-looking commitments?
Delta expects full-year 2024 capital spending of approximately $5.0 billion, excluding the New York-LaGuardia project, primarily for aircraft. It expects to spend about $400 million on the LaGuardia project in 2024. Aircraft purchase commitments totaled $20.7 billion, with deliveries scheduled from 2024 onward, and the company projects a 2024 effective tax rate of 23% to 25%.
06—Continue