CHICAGO (Reuters) – Delta Air Lines on Wednesday presented an optimistic outlook for the current quarter after posting first-quarter profit that beat Wall Street expectations thanks to strong travel demand.
The stock was up nearly 5% in pre-market trading.
“We expect continued strong momentum in our business,” said Ed Bastian, president and CEO of the group.
The Atlanta-based carrier forecast adjusted earnings of $2.20 to $2.50 (2.04-2.32 euros) per share for the quarter ending in June, compared with analysts’ expectations of a profit of $2.20 to $2.50 per share. $23 per share, according to LSEG data.
It forecasts an operating margin of 14% to 15%, with a 5% to 7% year-over-year increase in second-quarter revenue.
The company reiterated its forecast of earnings of $6 to $7 per share in 2024, with free cash flow of $3 billion to $4 billion.
Global demand for travel is holding up. The International Air Transport Association (IATA) predicts that 4.7 billion people will travel in 2024, up from 4.5 billion in 2019. In the United States, passenger traffic is expected to reach a record high this year, according to the Airlines for America trade association.
Delta shares have risen about 18% this year, outperforming the S&P 500’s +9% this year, and compared with a 3% decline in the NYSE Arca Airline index.
(Reporting Rajesh Kumar Singh; Dimitri Rhodes, editing by Kate Entringer)
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