Delta Air Lines (NYSE: DAL) has reported its financial results for the September quarter of 2024, and the numbers are in. The company's operating revenue for the quarter was $15.7 billion, with an operating income of $1.4 billion and an operating margin of 8.9 percent. This resulted in pre-tax income of $1.6 billion and earnings per share of $1.97. The operating cash flow for the quarter was $1.3 billion, with payments on debt and finance lease obligations totaling $263 million. Delta's total debt and finance lease obligations stood at $17.7 billion at the end of the quarter.
On a non-GAAP basis, which includes the impact of the crowdstrike-caused outage, Delta reported operating revenue of $14.6 billion, operating income of $1.4 billion, and an operating margin of 9.4 percent. The pre-tax income was $1.3 billion, resulting in earnings per share of $1.50. The operating cash flow for the quarter was also $1.3 billion, with free cash flow totaling $95 million and adjusted debt to EBITDAR of 2.9x.
The crowdstrike-caused outage had a significant impact on Delta's financial metrics for the quarter, with a decrease in operating margin, earnings per share, total revenue, ASMs, TRASM, and an increase in non-fuel CASM.
Looking ahead to the December quarter, Delta is expecting total revenue to grow by 2% to 4% year-over-year, with an operating margin of 11% to 13% and earnings per share in the range of $1.60 to $1.85. The company is optimistic about the improving industry backdrop and strong demand for travel, particularly during the holiday period.
Delta's diversified revenue base, led primarily by premium and loyalty, made up 57% of total revenue in the September quarter. Premium revenue growth continued to outpace main cabin in domestic and international markets, and total loyalty revenue grew by 6% year-over-year.
In terms of cost performance, Delta reported operating expenses of $14.3 billion, with adjusted non-fuel costs amounting to $10.1 billion. The non-fuel CASM increased by 5.7% year-over-year, while adjusted fuel expense decreased by 6% year-over-year.
On the balance sheet and liquidity front, Delta achieved a meaningful milestone with its balance sheet receiving an upgrade to investment grade from Fitch. The company's adjusted net debt stood at $18.7 billion at the end of the quarter, representing a reduction of $2.9 billion from the end of 2023. Delta also made debt repayments of $2.4 billion year-to-date.
Operationally, Delta operated the most on-time airline year-to-date, leading its competitive set in on-time departures and arrivals and network peers in completion factor. The airline took delivery of 27 aircraft year-to-date, including the A321neo, A330-900, and A350-900.
Delta's commitment to environmental, social, and governance initiatives was also evident, with the airline partnering with Flint Hills Resources to develop a 30-million gallon per year sustainable aviation fuel blending facility in Minneapolis and leading cross-enterprise initiatives to save over 16 million gallons of fuel year-to-date.
Delta's CEO, Ed Bastian, expressed confidence in the company's position to finish the year strong, with an expectation of one of the most profitable fourth quarters in its history.
For more detailed financial modeling metrics, additional information can be found in the supplemental information section under quarterly results on ir.delta.com.
Following these announcements, the company's shares moved -0.0%, and are now trading at a price of $50.81. If you want to know more, read the company's complete 8-K report here.
