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Delta Smashes Q4 Earnings Forecast, Says Taking Customers Amid 737 MAX Grounding

Delta Air Lines blasts Wall Street's fourth quarter earnings forecast, and posted a record 2019 profit of $1.6 billion, as the carrier continues to steal customers from rivals amid the grounding of Boeing's 737 MAX.

Delta Air Lines Inc.  (DAL) - Get Delta Air Lines Inc. Report posted much stronger-than-expected fourth quarter earnings Tuesday and said it was continuing to take customers from rivals thanks to the grounding of Boeing's 737 MAX aircraft. 

Delta said earnings for the three months ending in December came in at $1.70 per share, up 30.7% from the same period last year and well ahead of the Street consensus forecast of $1.40 per share. Group revenues, Delta said, rose 7% to $11.44 billion, again topping analysts' forecasts of an $11.34 billion tally.

Looking into the 2020 financial year, Delta said it sees earnings in the region of $6.75 to $7.75 per share, compared to the Refinitiv forecast of $7.21 per share. Delta also added it was picking up new customers from rivals thanks in part to the ongoing grounding of Boeing's  (BA) - Get The Boeing Company Report 737 MAX jet.

 "2019 was a truly outstanding year on all fronts – the best in Delta's history operationally, financially and for our customers," said CEO Ed Bastian. "Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success. I'm pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019." 

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"As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75."  

Delta Airlines shares were marked 3.3% higher in early Tuesday trading  following the earnings release to change hands at $61.56 each.

Delta also said it sees TRASM, a key industry metric that measures revenues for available seat miles, rising between 2% and 3%.

Overall, this result demonstrates a healthy demand environment over the holiday period, and solid momentum entering 2020, which we would expect to lift the group today," said Credit Suisse analyst Jose Caiado.

Delta Air Lines Q4 Earnings graphic