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Delta Air Lines income $1.6 billion

Staff writer |
Delta Air Lines reported financial results for the September 2014 quarter. Pre-tax income was $1.6 billion, excluding special items, an increase of $431 million over the September 2013 quarter on a similar basis.

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Delta's net income for the September 2014 quarter was $1.0 billion, or $1.20 per diluted share, and its operating margin was 15.8 percent, excluding special items.

On a GAAP basis including special items, Delta's pre-tax income was $579 million, operating margin was 7.5 percent and net income was $357 million, or $0.42 per diluted share.

Results include $384 million in profit sharing expense in recognition of Delta employees' contributions toward achieving the company's financial goals, which makes a year-to-date profit sharing accrual of $823 million.

Delta generated $910 million of free cash flow during the September 2014 quarter. The company used its strong cash generation in the quarter to reduce its adjusted net debt to $7.4 billion and return $325 million to shareholders through dividends and share repurchases.

"With another record profit, solid margin expansion and nearly $1 billion of free cash flow, Delta's results are consistent with high-quality S&P 500 industrials," said Richard Anderson, Delta's chief executive officer.

"While we have more work ahead of us to achieve our long-term financial goals, we expect a record fourth quarter of 2014 with an operating margin of 10-12%. For the full year, we expect a pre-tax profit in excess of $4 billion. We have the right foundation in place for an even stronger 2015, proven strategies for Delta, and 80,000 Delta employees who are the very best in the industry."

Delta's operating revenue improved 7 percent, or $688 million, in the September 2014 quarter compared to the September 2013 quarter, driven by continued strength in corporate and domestic revenues. Traffic increased 3.7 percent on a 3.2 percent increase in capacity.

Passenger revenue increased 6 percent, or $522 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 2.4 percent year-over-year with a 1.9 percent improvement in yield. Seat-related products and other merchandising initiatives increased revenues by nearly $50 million versus the prior year period.

Cargo revenue increased 7 percent, or $15 million, on higher freight yields and volumes. Other revenue increased 15 percent, or $151 million, driven by joint venture, SkyMiles revenues, and third-party refinery sales.


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