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Delta Air Lines 8-K Report, Financial Results (Jul 11, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 11, 2024
Period End
July 11, 2024
Security
DAL
In the record · 2016–202610-K1210-Q338-K210

DAL filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 210 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Apr ’18Apr ’18
  2. Impairment8-K · May ’20May ’20
  3. Material agreement8-K · Jul ’22Jul ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed July 11, 2024. Cited figures are marked; the original filing is the authoritative source.

Delta Air Lines, Inc. reported financial results for the quarter ended June 30, 2024, furnished in Exhibit 99.1 (press release) and Exhibit 99.2 (supplemental information) to this Form 8-K dated July 11, 2024.

On a GAAP basis, the June quarter showed operating revenue of $16.66 billiona, operating income of $2.27 billion (13.6% operating margin), pre-tax income of $1.77 billion, and diluted EPS of $2.01, compared with diluted EPS of $2.84 in the June 2023 quarter. On an adjusted (non-GAAP) basis, operating revenue was $15.41 billion, up 5.4% year over year, with an operating margin of 14.7%, pre-tax income of $2.00 billion, and adjusted EPS of $2.36. Operating cash flow was $2.45 billion and free cash flow was $1.27 billion on an adjusted basis.

The company emphasized debt reduction, reporting adjusted net debt of $19.17 billionb at quarter end, down $2.25 billion from December 31, 2023 (per the reconciliation table), and adjusted debt to EBITDAR of 2.8x, down from 3.0x. Management stated that debt reduction remains its top financial priority and that it is progressing toward investment-grade ratings. The company also announced a 50 percent increase in its quarterly dividend beginning in the September 2024 quarter and reiterated full-year 2024 guidance of EPS of $6 to $7 and free cash flow of $3 to $4 billion.

For the September 2024 quarter, Delta guided to total revenue growth of 2% to 4% year over year, an operating margin of 11% to 13%, and EPS of $1.70 to $2.00c, with capacity (ASMs) growth of 5% to 6% and non-fuel unit costs (CASM-Ex) up 1% to 2%. Management noted that capacity growth is decelerating into the second half as the company returns to a normal cadence of aircraft retirements.

02—Key points

Key Highlights

  1. June quarter GAAP diluted EPS of $2.01 versus $2.84 a year earlier; adjusted diluted EPS of $2.36 versus $2.68.
  2. Record June quarter operating revenue: GAAP $16.66 billion (up 7% year over year); adjusted $15.41 billion (up 5.4%), with adjusted TRASM down 2.6%.
  3. Premium, loyalty and other diversified revenue comprised 56% of adjusted revenue; American Express remuneration was $1.9 billion, about 9% higher than 2023.
  4. Adjusted net debt fell to $19.17 billion, a $2.25 billion reduction from year-end 2023; adjusted debt to EBITDAR improved to 2.8x from 3.0x.
  5. Quarterly dividend to increase 50% beginning in the September 2024 quarter.
  6. FY 2024 guidance reiterated: EPS of $6 to $7 and free cash flow of $3 to $4 billion.
  7. September 2024 quarter outlook: total revenue up 2% to 4%, operating margin of 11% to 13%, EPS of $1.70 to $2.00, and fuel price guidance of $2.60 to $2.80 per gallon.

03—Questions

Frequently Asked Questions

  1. How did Delta perform in the June 2024 quarter?

    Delta reported GAAP operating revenue of $16.66 billion, operating income of $2.27 billion, and diluted EPS of $2.01. Adjusted for third-party refinery sales, unrealized investment gains and losses, and debt extinguishment losses, EPS was $2.36 and operating margin was 14.7%.

  2. Why did GAAP EPS decline from the prior year?

    GAAP diluted EPS fell to $2.01 from $2.84, largely reflecting a $196 million mark-to-market loss on investments within non-operating expense versus a $128 million gain in the prior-year quarter, along with lower pre-tax income. Adjusted EPS declined to $2.36 from $2.68.

  3. What is Delta doing with its debt and dividend?

    Delta made $1.4 billion in debt and finance lease payments in the quarter and $2.1 billion in the first half. Management calls debt reduction its top financial priority and is progressing toward investment-grade ratings. The quarterly dividend will rise 50% starting in the September 2024 quarter.

  4. What is the outlook for the September 2024 quarter?

    Delta expects total revenue growth of 2% to 4%, an operating margin of 11% to 13%, and EPS of $1.70 to $2.00. It expects capacity growth of 5% to 6% and non-fuel unit costs up 1% to 2%, with capacity growth moderating as aircraft retirements normalize.

04—Continue

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