Delta Air Lines Posts Q3 Bottom-Line Slightly Below Street View

Delta Air Lines Inc DAL reported a third-quarter FY22 adjusted operating revenue growth of 3% from Q3 FY19 to $12.8 billion. Operating revenue on a GAAP basis rose 11% versus Q3 FY19 to $13.98 billion.
Adjusted EPS was $1.51 below the consensus of $1.53.
Domestic passenger revenue was 2% higher, and international passenger revenue was 97% recovered compared to the September quarter of 2019.
Total passenger revenue was $11.5 billion, nearly flat with 3Q19. Cargo revenue increased by 27% to $240 million compared to 3Q19.
Delta recorded an adjusted operating income of $1.5 billion, compared to $2.1 billion in 3Q19, and the adjusted operating margin was 11.6%, down by 480 bps.
Total operating expenses increased by 19% from 3Q19 to $12.51 billion in the quarter.
Delta Air Lines generated an operating cash flow of $869 million. Adjusted net debt at quarter-end was $20.5 billion.
Delta ended the September quarter with $11.2 billion in liquidity, including $2.8 billion in undrawn revolver capacity.
Total revenue per available seat mile increased by 34% from 3Q19 and increased 23% on an adjusted basis. The passenger load factor was 87% vs. 88% in 3Q19.
Compared to 3Q19, CASM-Ex was 22.5% higher on 12.43% less capacity.
Adjusted fuel price of $3.53 per gallon was down 7.5% sequentially. Compared to the June quarter of 2019, prices were up 80%.
4Q22 Outlook (compared to Q4 2019): On a non-GAAP basis, Delta Air Lines expects total revenue to be up 5%-9% and EPS to be $1.00 - $1.25.
DAL expects an adjusted net debt of ~$22.5 billion.
Price Action: DAL shares are trading lower by 1.71% at $29.71 during the market session on Thursday.
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