Delta Air Lines Inc (NYSE:DAL).'s shares saw a rise of 2.2% in premarket trading on Thursday, marking three consecutive gains after hitting a five-month low of $35.24 on October 3. This rally follows the airline's announcement that it surpassed third-quarter profit expectations, with strong demand for travel continuing into the current quarter.
The company reported a net income increase to $1.11 billion ($1.72 per share), up from $695 million ($1.08 per share) in the previous year. Adjusted earnings per share rose to $2.03 from $1.51, surpassing consensus of $1.95.
Revenue grew by 10.8% to reach $15.49 billion, driven by a 6% rise in domestic passenger revenue to $8.66 billion and a 35% jump in international revenue, including a 34% growth in transatlantic revenue. The load factor improved to 88% from 87%, traffic increased by 17%, and available seat miles rose 16% to 73.2 billion.
According to InvestingPro data, Delta's market cap stands at $23.04 billion with a P/E ratio of 7.65, indicating that it's trading at a low earnings multiple. The company's revenue for the last twelve months (LTM2023.Q2) was $55.75 billion, marking a growth of 33.38%. This growth, albeit significant, has been slowing down recently, as per InvestingPro Tips.
Despite Delta's stock falling by 25% over the past three months, mirroring a 24.5% drop in U.S Global Jets ETF and a 2.1% slip in the S&P 500 index, the airline is optimistic about its future prospects. In fact, the InvestingPro data shows that the company's price has fallen significantly over the last three months, but it also notes that Delta remains a prominent player in the Passenger Airlines industry.
In light of record September revenue and overall adjusted revenue meeting expectations, Delta has raised its sales growth outlook for 2023 to approximately 20%. However, it has slightly tempered its earnings per share (EPS) guidance, adjusting it to a range of $6 - $6.25. This move aligns with InvestingPro Tips that indicate 16 analysts have revised their earnings downwards for the upcoming period, but they still predict the company will be profitable this year.
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