Delta Air Lines on Wednesday reported a higher-than-expected first quarter profit and gave a strong outlook for the current period, sending its shares sharply higher.
Delta forecast that operating margin, a measure of income to costs, and unit revenue, an important airline measure known as passenger revenue per available seat mile, would both expand in the current period.
Delta "has been outperforming on the revenue front and costs are being kept in line," said Kevin Crissey, an airline analyst with Skyline Research.
Delta, the third-largest U.S. airline by revenue behind American Airlines and United Continental said gains in corporate market share and fees for items such as seat upgrades and baggage would bolster the second quarter.
In the first quarter, passenger revenue rose in the United States and Latin America and fell in the Atlantic and Pacific regions, and the company benefited from lower fuel and plane maintenance costs. Delta canceled more than 17,000 flights in the quarter because of winter weather, costing it $90 million in revenue.
Net income was $213 million, or 25 cents a share, up from $7 million, or one cent a share, for the year-earlier first period.
Excluding items such as fuel-hedge contract adjustments and charges for fleet changes, profit was 33 cents a share, compared with 29 cents expected by analysts on average, according to Reuters.