NEW YORK ( TheStreet) -- Delta (DAL - Get Report) wrote off $1.2 billion due to fuel hedges gone bad in the fourth quarter, saw declining unit revenue in every international sector and increased capacity by nearly 4%.

Yet the carrier still grew profit by 70%, increased revenue by 6%, beat estimates by a penny, posted a 13% margin and forecast similar margin in the current quarter.

In a report issued Tuesday morning, Stifel analyst Joseph DeNardi boosted estimates for the four largest U.S. carriers.

DeNardi increased his target price for Delta to $65 from $60, and he increased his 2015 earnings estimate to $5.40, well above consensus. Analysts surveyed by Thomson Reuters estimate $4.88.

Not worried about declines in international passenger revenue per available seat mile (PRASM), DeNardi wrote "we expect domestic PRASM to increase roughly 1% in 2015, which is offset by a low single digit decline in international PRASM."

Cowen & Co. analyst Helane Becker had been worried, before Delta reported that ticket prices could decline.

However, Becker wrote Tuesday morning, following the earnings report: "Have no fear. The revenue environment remains clear.

"The fear heading into 4Q14 earnings was that PRASM trends would turn negative as a result of lower jet fuel costs," Becker wrote. "With PRASM guidance above expectations we believe those fears should subside.

 "Delta's guidance implies better-than-expected PRASM as the airlines continue to price their product based on demand," she wrote.

CRT Capital analyst Mike Derchin wrote that a 5% growth forecast in the current quarter is "on high side." In the Delta earnings call, he said, winter storm impact must be disclosed as well as capacity plans for the remainder of 2015: It's important for stocks that DAL maintains capacity discipline."

For the fourth quarter, Delta reported net income of $649 million, or 78 cents a share. Analysts surveyed by Thomson Reuters had estimated 77 cents. Revenue grew 6% to $9.6 billion, in line with estimates.

"As we begin 2015, we have a significant opportunity from lower fuel prices, which will drive more than $2 billion in fuel savings over 2014," said CEO Richard Anderson, in a prepared statement. "Through our capacity discipline, pricing our product to demand, and the fuel savings, we expect to drive double-digit earnings growth, along with increased free cash flow and a higher return on invested capital in the upcoming year."

Delta recorded a $1.4 billion special items charge, net of taxes, related to fuel hedging.

By region, fourth-quarter domestic revenue grew 10.7% to $4.2 billion, while passenger revenue per available seat mile grew 5.2%. But PRASM declined in every international region, falling 5.2% in the Pacific, 4.2% in Latin America and 0.5% in the Atlantic. Consolidated revenue grew 4.6% while consolidated capacity grew 3.7%.

"While we face headwinds from the stronger dollar and lower fuel prices going forward, we have confidence we can continue to generate top-line growth as we realize additional benefits from our Virgin Atlantic joint venture, restructure our Pacific network, gain additional corporate share, and ramp up our merchandising efforts with branded fares and enhanced customer segmentation," said President Ed Bastian, in a prepared statement.

Written by Ted Reed in Charlotte, N.C.


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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.