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Delta adjusts third-quarter guidance

Direct News Source

07-Sep-2016 Delta today provided adjusted guidance for third-quarter financials following the August outage that resulted in significant operational disruptions. Chief Financial Officer Paul Jacobson, presenting at the Cowen Global Transportation Conference, said Delta is on track to produce a solid 18-19 percent operating profit margin (compared to a prior outlook of 19-21 percent) and nearly $1.5 billion of operating cash flow, despite headwinds from operational disruption, volatile fuel prices and continued unit revenue weakness.

Jacobson also told investors that the outage and subsequent operational recovery are expected to reduce September quarter pretax income by $150 million. That figure includes the $100 million in negative revenue impact from the outage reported on Sept. 2, and $50 million in net costs of the outage. He reiterated to investors Delta’s focus on being the first network carrier to return to positive unit revenue growth – an important indicator that margins and cash flows are sustainable regardless of the direction of fuel prices.