Ed Bastian, CEO of Delta Air Lines, speaks on CNBC's Power Lunch on December 17, 2024.
Adam Jeffrey | CNBC
Delta AirlinesFirst-quarter forecasts on Friday beat analysts' expectations as the carrier forecast strong travel demand to start the year, which CEO Ed Bastian said was likely to be the carrier's best ever.
Delta said it expects to generate more than $4 billion in free cash this year, up 18% from 2024 and in the middle of its annual target of $3 billion to $5 billion. For the full year, it expects adjusted annual earnings of more than $7.35 per share.
“We feel very good going into the new year,” Bastian told CNBC. “Everywhere, we see consumers continuing to prioritize experience over goods.”
This is preparing Delta for “our best financial year in our history,” Bastian added.
Here's how the company performed in the three months ended December 31 compared to Wall Street expectations based on consensus estimates from LSEG:
Earnings per share: $1.85, adjusted vs. $1.75 expected. Revenue: $14.44 billion, adjusted vs. $14.18 billion expected.
Delta said it expects revenue to rise 7% to 9%, beating analysts' growth expectations of about 5% polled by LSEG. The carrier expects first-quarter earnings to be between 70 cents and $1, slightly above Wall Street expectations of 65 cents to 97 cents.
The Atlanta-based airline is the first major U.S. airline to report earnings for the quarter. Airlines have enjoyed strong demand for travel after the pandemic, which analysts said is likely to continue this year, with some deals along the way for consumers.
Delta said it is capitalizing on the trend toward premium travel as more customers purchase more spacious seats or credit card rewards.
Delta American Express The partnership brought in $2 billion in the fourth quarter, up 14% from the same period a year earlier. Premium seat revenue, such as first class and premium economy, rose 8% in the fourth quarter to $5.2 billion compared with a 2% rise in main cabin ticket revenue to about $6 billion.
Unit revenue, a measure of how much revenue an airline generates versus its flight volume, rose 4% in the fourth quarter of 2023.
Delta's profits fell 59% to $843 million in the final three months of the year compared with the same period in 2023 as expenses, including salaries, rose 7%, or $942 million. Revenues rose 9% to $15.6 billion compared to the previous year.
After adjusting for one-time items, Delta reported earnings per share of $1.85 in the fourth quarter, on adjusted revenue of $14.44 billion, both ahead of analyst estimates.
