Delta Air Lines (DAL) second quarter earnings of 23

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Delta Air Lines posted its highest quarterly revenue and profit ever, thanks to surging travel demand that defied fears of an economic slowdown for months.

International travel and demand for premium seats such as first class were notable during the three months ended June 30, while a 22% drop in Delta fuel costs boosted the carrier’s bottom line.

The Atlanta-based carrier on Thursday raised its 2023 earnings forecast to $6 to $7 per share, up from its estimate last month at the high end of the $5 to $6 per share range.

Shares of Delta rose more than 3% in premarket trading after the results were announced.

Here’s how Delta performed in the quarter ended June 30 compared to Wall Street expectations based on Refinitiv consensus estimates:

• Adjusted earnings per share: 2.68 cents versus the expected $2.40.
• Adjusted revenue: 14.61 billion dollars, compared to the expected 14.49 billion dollars.

Delta is the first US airline to publish second-quarter results, and its report sets an optimistic tone for the rest of the year.

CEO Ed Bastian said he expects consumers’ desire to travel to drive bookings for years.

“I think the trends we’ve seen this year will continue,” he said in an interview.

In the third quarter, Delta expects to earn $2.20 to $2.50 per share, above analyst expectations, on a capacity increase of 16%. The airline expects a jump in revenue of up to 14% over the previous year.

Delta’s net income for the quarter was $1.83 billion, or $2.84 per share, up from $735 million, or $1.15 per share, a year ago. Adjusting for some items, earnings per share was $2.68 for the quarter, up from $1.44 in the same period last year.

The company’s net income was the highest since the last quarter of 2013, when the company returned more than $8 billion in tax loss credits to its balance sheet.

Delta brought in $14.61 billion in revenue, adjusted for divesting sales from its refineries, in the three months ended June 30, up 19% from a year ago, and above analyst estimates. Total revenue of $15.58 billion increased 13% over the prior year.

Transatlantic travel was particularly strong in the spring and early summer, with revenue from those flights up more than 60% from a year ago, compared to an 8% increase in domestic revenue and a 21% increase in passenger revenue overall. Delta and its rivals have boosted access to Europe this year in anticipation of a resurgence. (Bastien told CNBC he recently traveled to the south of France.)

Premium ticket revenue growth also outpaced that of the main economy cabin.

Unit revenue, a measure of how much airlines generate for each seat they fly a mile, was up 1% year-over-year, with a 17% increase in capacity.

“If you asked any quarter where we grew capacity in high double digits and held our overall pricing, that would be pretty amazing,” Bastian said.