What to expect when Delta Air Lines (DAL) reports Q2 2023 earnings results

Shares of Delta Air Strains Inc. (NYSE: DAL) had been up 2% on Friday. The inventory has gained 47% year-to-date. The airline firm is scheduled to report its second quarter 2023 earnings outcomes on Thursday, July 13, earlier than market open. Right here’s a take a look at what to anticipate from the earnings report:

Income

Delta lately raised its income forecast for the second quarter of 2023 and presently expects its prime line to develop 17-18% year-over-year. Analysts are estimating income of $14.4 billion, which might mirror a 17% progress from the identical interval a 12 months in the past. In Q1 2023, GAAP working income grew 36% YoY to $12.8 billion.

Earnings

Delta additionally raised its earnings steering for Q2 2023 and now expects EPS to vary between $2.25-2.50. Analysts are projecting EPS of $2.36 for the second quarter which compares to EPS of $1.44 within the prior-year interval. In Q1 2023, adjusted EPS was $0.25.

Factors to notice

The demand for air journey continues to be sturdy. Components comparable to sturdy employment, increased wages and the comfort of the hybrid work mannequin are working in favor of journey demand. As well as, the vast majority of the airline trade’s income is coming from higher-income prospects or premium prospects. All of those developments profit Delta.

Delta is seeing a good income setting. The corporate expects its unit income for the second quarter to be flat to up 1%. Capability is predicted to be up 17% YoY in Q2. There’s sturdy demand for leisure journey amongst premium prospects and the corporate expects a steady company journey setting. Delta can be seeing progress in income from its premium merchandise. They’re a big contributor to unit revenues and they’re rising steadily.

For the second quarter of 2023, Delta expects working margin to be 16%. This compares to working margin of 11% within the prior-year quarter. In Q1 2023, working margin was down 2.2%. The corporate expects CASM ex-fuel to extend 1-3% YoY in Q2. Within the first quarter, CASM ex-fuel was up 4.7% YoY.