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UPDATE 4-Delta Air profit rises, stronger outlook boosts shares

* Adjusted 1st-qtr profit 33 cts/share vs 29 cents estimate

* Profit surges despite cancellations in wake of winter storms

* Operating margin to expand in current quarter

* Shares up about 5 pct

(Adds analyst comment, outlook details, updates stock price)

April 23 (Reuters) - Delta Air Lines Inc reported a higher-than-expected first-quarter profit on Wednesday and gave a strong outlook for the current period, sending its shares up nearly 5 percent.

The carrier forecast that operating margin, a measure of income to costs, and passenger unit revenue 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 Group Inc and United Continental Holdings Inc, said gains in corporate market share and fees for items such as seat upgrades and priority boarding would bolster the second quarter.

In the first quarter, strong demand helped overcome the negative effect of 17,000 flight cancellations from winter storms that shaved $90 million from revenue. The company benefited from lower fuel and plane maintenance costs.

Net income was $213 million, or 25 cents a share, up from $7 million, or 1 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 Thomson Reuters I/B/E/S.

Quarterly revenue rose 5 percent to $8.92 billion. Yield, a measure of the average airfare paid per mile flown, rose 1 percent to 17.21 cents. Passenger revenue per available seat mile, or unit revenue, rose 3 percent to 14.24 cents.

Operating expenses were roughly flat in the quarter. Costs for fuel and related taxes fell 3 percent and expenses tied to maintenance of aircraft dropped 9 percent.

Atlanta-based Delta bolstered revenue by charging more for seats with greater leg room, replacing 50-seat jets with larger, more cost-efficient planes while buying a refinery to help reduce fuel expenses.

Delta "continues to get higher yields from attracting more corporate travelers," said S&P Capital IQ equity analyst Jim Corridore.

Delta said it expected an operating margin of 14 to 16 percent for the second quarter, better than the year-earlier period's 11 percent. That compared with Crissey's expectation of 12 to 14 percent.

The carrier forecast that unit revenue would rise in the mid-single-digit percentage range in the second period. April unit revenue was trending up in the 6 percent range, with May and June looking poised for growth of 5 to 7 percent, Delta said during a conference call.

Shares of Delta were up 4.7 percent at $36.59 on Wednesday afternoon on the New York Stock Exchange as other airlines also gained. Delta's stock has risen about 33 percent this year, compared with a 22 percent rise for United and a 45 percent rise for American.

(Editing by Franklin Paul, Sofina Mirza-Reid, Chizu Nomiyama and Matthew Lewis)