UPDATE 2-Delta Air profit slumps as costs rise

* Operating profit 28 cents/shr, in line with forecasts

* Revenue up 2 percent; expenses climb 8 percent

* Key revenue measure seen rising in current quarter

Jan 22 (Reuters) - Delta Air Lines reported a lower fourth-quarter profit on Tuesday as fuel and compensation costs rose and Superstorm Sandy hurt its airline and oil refinery operations.

Special items also took a toll, including a charge of $122 million tied to the company's restructuring of its aircraft fleet and a loss of $106 million on debt extinguishment.

Delta cited nearly $100 million in impact from Sandy, which barreled through the U.S. Northeast in late October and led to thousands of flight cancellations as New York-area airports shut down. The carrier said the storm also slowed output at its Pennsylvania oil refinery, which had a $63 million net loss in the quarter.

Operating expenses climbed 8 percent, with costs for fuel and related taxes up 18 percent. Expenses tied to salaries increased 7 percent.

Net earnings fell to $7 million, or 1 cent a share, from $425 million, or 50 cents a share, a year earlier.

Excluding one-time items, profit was 28 cents a share, in line with analysts' average forecast, according to Thomson Reuters I/B/E/S.

Operating revenue rose 2 percent to $8.6 billion.

Delta, the No. 2 airline behind United Continental Holdings , has been upgrading plane seats and expanding in-flight food and entertainment options to entice travelers to spend more. It has also launched partnerships with non-U.S. airlines to position itself to win new customers.

Passenger revenue rose 3 percent in the fourth quarter, while unit revenue rose 4.3 percent.

Delta projected that unit revenue, a measure of pricing power and how full planes are, would rise 4 percent to 6 percent in the current quarter.

"The investments we have made in our product, technology, facilities and employees have generated the momentum we've built in our earnings, but those investments have not come without cost," Chief Financial Officer Paul Jacobson said in a memo to staff.

He added that the carrier must stay "disciplined with our spending" and focused on eliminating costs that don't add value to the business.