Delta Air Lines Reports Slight Miss in September Quarter: $1.5 EPS, $14.6 B in Revenue
In the September quarter of 2024, Delta Air Lines (NYSE: DAL) reported robust financial results, showcasing an industry-leading performance. The company achieved an operating revenue of $15.7 billion under GAAP metrics and $14.6 billion in adjusted terms, despite the financial impact of a major operational disruption caused by a CrowdStrike-related outage.
The operating income reached $1.4 billion, translating to an operating margin of 8.9% and a pre-tax income of $1.6 billion with a 10% pre-tax margin. Earnings per share (EPS) stood at $1.97, while the adjusted EPS, accounting for the outage, was $1.50. Delta’s strong operational performance was further highlighted by a $1.3 billion operating cash flow and a free cash flow of $95 million for the quarter, contributing to a year-to-date free cash flow of $2.7 billion.
The outage, which affected operations in August, had a direct revenue impact of approximately $380 million, primarily due to flight cancellations and customer compensations. Despite this setback, Delta managed to maintain its operational efficiency, with a significant portion of its revenue stemming from premium and loyalty programs.
The airline’s diversified revenue streams, including a 27% increase in cargo revenue, underscored its resilience. This quarter also marked Delta’s continued focus on debt reduction, with payments amounting to $263 million, bringing total debt and finance lease obligations down to $17.7 billion by the quarter’s end.
Delta’s September Affected by CrowdStrike Outage, Falls Short of Expectations
Delta’s financial performance for the quarter exceeded expectations in several key areas. The adjusted operating revenue of $14.6 billion was in line with the anticipated revenue of $14.64 billion, even with the significant financial impact of the CrowdStrike (NASDAQ: CRWD) outage.
The adjusted EPS of $1.50 fell slightly short of the expected $1.52, reflecting the 45-cent impact of the outage. However, the company’s ability to maintain a strong operating margin of 9.4% on an adjusted basis, despite the challenges, highlights its operational resilience.
Comparatively, Delta’s performance against the prior year showed a mixed picture. The adjusted operating income declined by 30% from $1.963 billion in the third quarter of 2023 to $1.373 billion in 2024, largely due to the outage.
However, the company’s pre-tax income saw a modest increase of 3%, demonstrating effective cost management and operational efficiency. The airline’s diversified revenue streams, particularly in premium products and loyalty programs, continued to drive differentiation, contributing 57% to the total adjusted operating revenue.
Delta Air Lines Optimistic on December Quarter Outlook
Looking ahead to the December quarter, Delta Air Lines provided optimistic guidance, expecting total revenue growth of 2% to 4% year-over-year. The company forecasts an operating margin expansion to 11% – 13%, indicating a strong recovery trajectory post-outage.
Delta anticipates earnings per share to range between $1.60 and $1.85, reflecting confidence in its operational capabilities and market position. The airline’s focus on efficiency is expected to drive low-single-digit growth in non-fuel unit costs for the year.
Delta’s strategic initiatives, including network expansion and fleet modernization, are set to bolster its competitive edge. The company plans to continue leveraging its diversified revenue base and strategic partnerships to enhance customer experience and drive revenue growth.
With strong booking trends for the holiday period and rationalized industry supply growth, Delta is well-positioned to capitalize on the improving demand environment as it transitions into 2025.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Back to 
