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- Dec 5, 2003
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Press Release Source: Delta Air Lines
Delta Air Lines Reports September 2004 Quarter Results
Wednesday October 20, 7:35 am ET
ATLANTA, Oct. 20 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL - News) today reported results for the quarter ended Sept. 30, 2004, and other significant news. The key points are, Delta:
-- Reports a third quarter net loss of $646 million, or $5.16 loss per
share.
-- Excluding non-cash charges described below, reports a third quarter net
loss of $592 million, or $4.73 loss per share.
-- Ends quarter with $1.45 billion in unrestricted cash.
see the rest at:
http://biz.yahoo.com/prnews/041020/nyw122_1.html
These results are in line with Delta's guidance from last week (as would be expected) so no real news.
Couple notes:
1. DAL managed to increase revenue through producing and selling more seats in spite of average revenue deterioration. As I've pointed out before, keeping revenue from decreasing is vital in order to maintain a viable business; UA and US have not been able to do that over the past couple years - although I do think US' transformation plan is geared to do that. In spite of $50M in lost revenue due to hurricanes, revenue was increased by flying 10.4% more RPMs with only 1.6% more aircraft - a sign of increasing efficiency.
2. DAL's problem is clearly costs. Given fuel prices, the cost cuts announced will
just get Delta to breakeven which is clearly not acceptable.
3. The MD11 proceeds have already been deposited and bolstered Delta's cash past the $1.5B mark but if Q4 cash burn is similar to Q3, Delta will have a hard time keeping acceptable cash levels until the employee cost cuts kick in by Jan (assuming a pilot deal is reached which does appear more likely since reports are that talks are focused on reducing the length of the concessions rather than the substance of them). The debt restructuring has got to move out just about all debt payments and cash requirements for the next 9 months or more.
4. Delta has met its pension funding requirements but stated it intends to apply for reductions allowed under the law passed this summer - indications that the company does not intend to dump its pension obligations.
While some will continue to see Delta in a negative light, these reports indicate that Delta is on track to turn itself around as soon as it gets the cost cuts it is seeking. A careful analysis of results shows that optimism in Delta's future is not kool-aid drinking but is justified.
Delta Air Lines Reports September 2004 Quarter Results
Wednesday October 20, 7:35 am ET
ATLANTA, Oct. 20 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL - News) today reported results for the quarter ended Sept. 30, 2004, and other significant news. The key points are, Delta:
-- Reports a third quarter net loss of $646 million, or $5.16 loss per
share.
-- Excluding non-cash charges described below, reports a third quarter net
loss of $592 million, or $4.73 loss per share.
-- Ends quarter with $1.45 billion in unrestricted cash.
see the rest at:
http://biz.yahoo.com/prnews/041020/nyw122_1.html
These results are in line with Delta's guidance from last week (as would be expected) so no real news.
Couple notes:
1. DAL managed to increase revenue through producing and selling more seats in spite of average revenue deterioration. As I've pointed out before, keeping revenue from decreasing is vital in order to maintain a viable business; UA and US have not been able to do that over the past couple years - although I do think US' transformation plan is geared to do that. In spite of $50M in lost revenue due to hurricanes, revenue was increased by flying 10.4% more RPMs with only 1.6% more aircraft - a sign of increasing efficiency.
2. DAL's problem is clearly costs. Given fuel prices, the cost cuts announced will
just get Delta to breakeven which is clearly not acceptable.
3. The MD11 proceeds have already been deposited and bolstered Delta's cash past the $1.5B mark but if Q4 cash burn is similar to Q3, Delta will have a hard time keeping acceptable cash levels until the employee cost cuts kick in by Jan (assuming a pilot deal is reached which does appear more likely since reports are that talks are focused on reducing the length of the concessions rather than the substance of them). The debt restructuring has got to move out just about all debt payments and cash requirements for the next 9 months or more.
4. Delta has met its pension funding requirements but stated it intends to apply for reductions allowed under the law passed this summer - indications that the company does not intend to dump its pension obligations.
While some will continue to see Delta in a negative light, these reports indicate that Delta is on track to turn itself around as soon as it gets the cost cuts it is seeking. A careful analysis of results shows that optimism in Delta's future is not kool-aid drinking but is justified.
). The crippled will walk again (hey, perhaps Al Gore can find the cure now that he's finished inventing the internet) and terrorism made into a nuisance (assuming Jacques Chirac and the U.N. give us the go ahead).
