Delta Air Lines Keeps Full-Year Profit Forecast as Fuel Costs Ease

Delta Air Lines reaffirmed its full-year profit forecast Friday and issued a stronger-than-expected third-quarter outlook. The carrier said it recovered 60 percent of its second-quarter fuel cost increase through higher fares, faster than historical patterns. It expects to recover more of the increase this quarter.

Delta reported nearly 14 percent revenue growth in the second quarter on about 1 percent capacity growth. Passenger revenue per available seat mile rose 11 percent from a year earlier. Premium revenue increased 17 percent while main-cabin revenue grew 8 percent. The airline said third-quarter volume will be roughly flat to slightly higher than last year.

Delta absorbed its highest quarterly fuel expense in company history, up $1.9 billion from a year earlier. Adjusted earnings fell 26 percent to $1.56 per share but still beat analysts' estimate of $1.48. The carrier forecast third-quarter adjusted earnings of $2.00 to $2.50 per share.

It expects mid-teen revenue growth and an operating margin of 11 percent to 13 percent. Delta said its fuel bill will be about $4 billion higher this year than last year and is assuming a third-quarter fuel price of about $3.15 a gallon.