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Mar 31, 2023
Delta Q1 2023 Earnings Report
Delta's Q1 2023 earnings were in line with guidance, driven by record revenue and strong demand.
Key Takeaways
Delta Air Lines reported a strong start to 2023, with revenue and earnings in line with guidance. The company achieved record March quarter revenue and operating cash flow, which enabled accelerated debt reduction. Delta expects record June quarter revenue and reiterates its full-year guidance for significant EPS growth and free cash flow.
Delta delivered record March quarter revenue, reflecting strength in demand and momentum in premium products and loyalty revenue.
The company expects record June quarter revenue, with an adjusted operating margin of 14 to 16 percent and earnings per share of $2.00 to $2.25.
Delta's record March quarter free cash flow of $1.9 billion enabled $1.2 billion of debt repayment.
The company is on track to reduce leverage to 3x to 3.5x in 2023 and remains committed to returning to investment grade metrics by next year.
Forward Guidance
Delta expects to deliver record revenue and an adjusted operating margin of 14 to 16 percent with earnings per share of $2.00 to $2.25 for the June quarter. The company reiterates its full-year guidance for revenue growth of 15 to 20 percent year over year, earnings of $5 to $6 per share and free cash flow of over $2 billion.
Positive Outlook
- Expect record June quarter revenue.
- Adjusted operating margin of 14 to 16 percent expected for June quarter.
- Earnings per share of $2.00 to $2.25 expected for June quarter.
- Full-year revenue growth of 15 to 20 percent year over year.
- Full-year earnings of $5 to $6 per share.
Challenges Ahead
- Non-fuel unit costs are expected to be 1 to 3 percent higher year over year for the June quarter.
- Ability to deliver unit cost declines in the second half of 2023.
- Achieving industry-leading operating margins of 10 to 12 percent for the full year.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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