BUSINESS

Delta Air Lines 3rd-qtr profit jumps on gains in value of fuel price contracts

10/24/2012 10:59 EDT | Updated 12/24/2012 05:12 EST
NEW YORK, N.Y. - Delta Air Lines said Wednesday that its third-quarter profit nearly doubled mostly due to the increasing value of its fuel contracts.

The world's second-largest airline earned $1.05 billion, or $1.23 per share, compared with $549 million, or 65 cents, a year earlier. Excluding one-time items, it earned $768 million or 90 cents — just shy of Wall Street expectations of 91 cents.

Revenue rose 1 per cent to $9.92 billion, also just under analysts' estimate of $9.93 billion, according to FactSet. The Atlanta-based airline says revenue was driven by its effort to trim seats according to demand. As it scaled back capacity, flights were slightly fuller.

Delta made 3 per cent more per passenger in the third quarter, which includes a bulk of the peak summer season but also incorporates one of the weakest months — September. Traffic at all the big airlines fell last month.

But Delta is eyeing a per-passenger revenue improvement of 4 per cent to 5 per cent in October, well above the 0.5 increase in September.

Fuel costs dropped 23 per cent in the third-quarter. Overall, operating expenses fell 4 per cent. Other expenses related to items like debt and interest fell 18 per cent.

Southwest Airlines said last week it squeezed out a small third-quarter profit in spite of a September slowdown. United Continental Holdings Inc., the parent of United Airlines, reports third-quarter results on Thursday.