Delta Air Lines (NYSE: DAL), one of the 10 top airline stocks on TipRanks, reported upbeat fourth-quarter 2021 results. Following the results, shares of the company rose 2.1% to close at $41.47 on Thursday.
Results in Detail
The company reported adjusted earnings of $0.22 per share, which comfortably beat the consensus estimate of $0.14 per share. It recorded adjusted earnings of $1.70 per share in the fourth quarter of 2019.
Additionally, operating revenues, including certain adjustments, came in at $9.47 billion, topping analysts’ expectations of $9.21 billion, but decreased 17.2% from 2019. Markedly, revenues were nearly 80% recovered to 2019 levels on the back of strong demand and pricing during the holiday season. Additionally, business trends and international travel were encouraging.
Adjusted operating revenues stood at $8.4 billion, which recovered around 74% of 2019 levels.
Adjusted total revenue per available seat mile (TRASM) came in at $0.1629, down 6.3% from 2019 levels, while adjusted average fuel price per gallon rose 5.5% to $2.10.
For 2021, Delta reported an adjusted loss of $4.08 per share, compared with earnings per share of $7.32 reported in 2019. Additionally, operating revenues, including certain adjustments, stood at $29.9 billion, down 36.4%.
In response to the reported results, Delta CEO Ed Bastian said, “2021 was a year like no other for Delta, with significant progress in our recovery supported by growing brand preference, enabling us to be the only major U.S. airline to deliver profitability across the second half of the year.”
Looking ahead, Bastian commented, “While the rapidly spreading omicron variant has significantly impacted staffing levels and disrupted travel across the industry, Delta’s operation has stabilized over the last week and returned to pre-holiday performance. Omicron is expected to temporarily delay the demand recovery 60 days, but as we look past the peak, we are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel.”
Delta expects total March quarter revenue to recover to 72% to 76% of 2019 levels, compared to 74% in the December quarter, as the rapid rise in omicron-related COVID cases is likely to impact the recovery in demand.
Looking ahead, Delta’s CFO Dan Janki said, “With omicron impacting our near-term outlook, we expect losses in January and February months with a return to profitability in the month of March. Despite expectations for a loss in the March quarter, we remain positioned to generate a healthy profit in the June, September and December quarters, resulting in a meaningful profit in 2022.”
Wall Street’s Take
Following the results, Susquehanna analyst Christopher Stathoulopoulos upgraded Delta to a Buy from a Hold but maintained the price target of $50 (20.57% upside potential).
Consensus among analysts is a Strong Buy based on 12 Buys versus 3 Holds. The average Delta price target of $52.93 implies 27.63% upside potential from current levels. Shares have gained 3.7% over the past year.
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Delta’s performance this quarter.
According to the tool, the Delta website recorded a 24.66% increase in global visits in December compared to the same period last year. Also, year-to-date website traffic growth stands at 33.32%.
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