Delta Air Lines (DAL) Q3 2024 earnings summary

Executive summary

• September quarter results were consistent with guidance, with EPS at the high end of initial guidance excluding a $0.45 impact from the CrowdStrike outage; operating income for Q3 2024 was $1.4B, down $587M from Q3 2023, mainly due to the outage and higher costs.

• Year-to-date on-time performance and completion factor lead the industry, even accounting for the outage; delivered industry-leading operational and financial performance with double-digit operating margin and nearly $3B free cash flow generated so far in 2024.

• Upgraded to investment grade by Fitch and Moody’s, reflecting progress on debt reduction and strong balance sheet; S&P one notch away with positive outlook.

• Nearly $1B accrued for profit sharing, expected to be among the highest in company history, recognizing employee contributions.

• Profitability expected to represent 50% of industry total, with double-digit ROIC more than twice the industry average.

Financial highlights

• Q3 2024 net income was $1.27B, up from $1.11B in Q3 2023; diluted EPS was $1.97 vs. $1.72; GAAP operating revenue for Q3 2024 was $15.7B, up 1% year-over-year.

• Operating cash flow YTD was $6.2B; $2.7B free cash flow after $3.6B reinvestment; free cash flow for Q3 2024 was $95M.

• Debt repayment of $2.4B YTD, including $900M early repayments; gross leverage at 2.9x; adjusted net debt at quarter end was $18.7B, down $2.9B from end of 2023.

• Fuel prices declined 9% YoY to $2.53/gal; average fuel price per gallon was $2.51, down from $2.76 in Q3 2023.

• American Express remuneration was $1.8B, up 6% YoY; cargo revenue up 27% YoY.

Outlook and guidance

• December quarter earnings expected to grow 30% YoY, with pre-tax income of $1.4B and record revenue; operating margin of 11%-13% and EPS of $1.60-$1.85.

• Full-year EPS expected around midpoint of $6–$7 guidance, excluding outage impact.

• December quarter revenue expected to increase 2–4% YoY on 3–4% higher capacity.

• Non-fuel unit cost growth for the year expected in low single digits, consistent with prior outlook.

• Liquidity is expected to meet needs for the next 12 months; positive operating cash flow anticipated for the rest of 2024.