Benefits of Delta Air Lines (DAL) 3T 22

A Delta Airlines Airbus A-350, flight number DL40 to Los Angeles, takes off from Kingsford Smith International Airport on July 26, 2021 in Sydney, Australia.

James D. Morgan | Getty Images

Delta Airlines expects to post another profit in the last quarter of the year and said leisure and business travel continue to recover.

The carrier said Thursday it expects fourth-quarter earnings of $1 to $1.25 a share, with revenue outpacing the same period of 2019 by 5 to 9 percent, a sign that higher airfares will remain farms.

Shares of Delta rose more than 4% in premarket trading after the report.

For the third quarter, Delta reported net income of $695 million, or $1.08 per share, on record revenue of nearly $14 billion, the result of an increase in summer travel with high rates to match. Adjusting for one-time items, Delta reported earnings per share of $1.51, while adjusted revenue was $12.8 billion, 3% above 2019 levels, despite a shorter timeline .

“The recovery in travel continues as consumer spending shifts towards experiences and demand improves across businesses and internationally,” CEO Ed Bastian said in an earnings statement.

Here’s how Delta fared in the third quarter, relative to Wall Street expectations based on consensus estimates from Refinitiv:

  • Adjusted earnings per share: $1.51 vs $1.53 expected.
  • Adjusted revenue: $12.84 billion vs $12.87 billion expected.

The Atlanta-based airline is the first U.S. carrier to report third-quarter results, and its upbeat forecast comes as clouds are forming over other industries, such as some retailers. American airlineswhich publishes its quarterly results next week, raises third-quarter revenue forecast Tuesday, as United Airlines plans another great transatlantic expansion for 2023, a bet that international travel will continue to rebound.

The start of Delta’s peak spring and summer travel season was rocky as disruptions prompted the airline and some of its rivals to cut summer flights to avoid more problems for travelers. On Wednesday, Delta said its capacity would be restored to 92% of 2019 levels in the fourth quarter and it would work to fully recover by next summer.

Delta and other airlines are grappling with rising fuel labor costs. Delta’s fuel bill for the third quarter rose nearly 48% from 2019 to $3.32 billion.

Even removing fuel, costs per available seat mile were up nearly 23% from last quarter 2019, in part increased because Delta wasn’t flying as much.

International travel, largely sidelined in 2020 and 2021, was a silver lining in the third quarter as unit revenue growth outpaced the domestic market for the first time since the pandemic began, Delta said, calling Italy, Spain and Greece popular destinations.

Delta and United executives recently said travel to Europe has been resistant this fall.

The airline said business bookings had recovered to 80% of pre-pandemic levels at the end of the quarter and recent surveys show that 90% of corporate accounts say they will maintain or increase travel in the fourth quarter versus the third.

The carrier said Hurricane Ian, which swept through Florida last month, cost it $35 million in revenue and impacted 3 cents on adjusted earnings per share.

Delta will hold a call at 10 a.m. ET to discuss the results.

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