Delta boarding change; USPS urged to capitalize on mailboxes
Morning Business Outlook: Delta Airlines is ending zone boarding in effort to discourage customers from lining up in the gate area and to speed up the process; Trump administration says the United States Postal Service should consider selling private companies access to your mailbox.
Delta Air Lines, the No. 2 U.S. airline, on Monday reported quarterly and full-year earnings and also warned that the partial government shutdown will cut into its first-quarter performance.
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In a conference call, the airline said that the shutdown will cost it $25 million this month. It also reported that its first-quarter earnings will be hurt by several factors, including the shutdown.
“Our March quarter adjusted unit revenue growth is expected to be flat to up two percent including impacts from the timing of Easter, increasing currency headwinds, and the ongoing government shutdown,” Glen Hauenstein, Delta’s president, said in a statement.
Delta reported that adjusted earnings per share (EPS) in the October-December quarter rose 42 percent to $1.30 — compared to Wall Street expectations of $1.26 per share — and net income jumped to $1.01 billion from $299 million.
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Revenue for the quarter rose to $10.74 billion from $10.23 billion in the year-earlier period, a 5 percent gain, but in line with expectations.
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Delta said adjusted unit revenue growth in its March quarter “is expected to be flat to up two percent including impacts from the timing of Easter, increasing currency headwinds, and the ongoing government shutdown.”
Shares of the airline fell 1.67 percent in premarket trading.
For the full year, adjusted pretax income was $5.1 billion, a $137 million decrease relative to 2017, as the company overcame approximately 90 percent of the $2 billion increase in fuel expenses. Full-year adjusted EPS were $5.65, up 19 percent compared to the prior year as the company recognized benefits from tax reform and a four percent lower share count.
“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,” Delta CEO Ed Bastian said in a statement. “Margin expansion is a business imperative and we remain confident in our full-year earnings guidance of $6 to $7 per share,” he added.
Analysts are expecting an EPS mark of $6.68 for the full year.
