Delta said earnings for the three months ending in December came in at $1.30 per share, up 42% from the same period last year and 3 cents ahead of the Street consensus. Group revenues, Delta said, rose 7.5% to $10.7 billion, a figure that narrowly missed analysts' forecasts. Delta said it sees first quarter earnings of between 70 and 90 cents a share, however, and an adjusted total revenue per available seat mile, or TRASM, growth rate of 2%, both of which misses market estimates.
"2018 was a successful year for Delta with record operational reliability, increasing customer satisfaction, and solid financial results in the face of higher fuel costs. Delta people are the foundation of our success and I am honored to recognize their efforts with $1.3 billion in profit sharing for 2018," said CEO Ed Bastian. "As we move into 2019, we expect to drive double-digit earnings growth through higher revenues, maintaining a cost trajectory below inflation, and the modest benefit from lower fuel costs. Margin expansion."
Delta shares rose 0.2% to $47.83 at the close of trading on Tuesday.
Bastian also said the ongoing U.S. government shutdown, which entered its 25th day today and is now the longest in history, will clip $25 million from Delta's revenues each month as Federal employees stay home.
Last week, American Airlines (AAL) - Get Report shares tumbled more than 10% after the biggest domestic carrier cuts its full year earnings guidance to a range of $4.40 to $4.60 a share, from a prior range of $4.60 to $5.00, as slumping jet fuel prices triggered a fare ware among rivals that hit the industry's bottom line.
Weaker business travel activity, linked to a slowing global economy, is also weighing on the sector, trimming expectations for TRASM, a key industry profit metric.
Delta cut its TRASM growth estimate earlier this month to around 3%, from a prior forecast of 3.5%, adding that " the pace of improvement in late December was more modest than anticipated."