Delta Air shares gain the most in a week on Thursday, quarterly adjusted earnings top estimates supported by higher fares

Delta Air Lines Inc’s quarterly adjusted earnings, reported on Thursday, exceeded Wall Street estimates, as benefits were drawn from higher fares.

Delta Air shares closed higher for a second consecutive trading session in New York on Thursday. It has also been the sharpest daily surge since July 2nd. The stock went up 1.16% ($0.69) to $60.16, after touching an intraday high at $60.79, or a price level not seen since December 3rd 2018 ($61.07).

Shares of Delta Air Lines Inc have risen 20.56% so far in 2019 compared with a 19.67% gain for the benchmark index, S&P 500 (SPX).

In 2018, Delta Air’s stock went down 10.89%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

Total adjusted operating revenue, excluding refinery sales, went up 8.7% year-on-year to $12.54 billion during the quarter ended on June 30th, fueled by a 10% surge in premium product ticket revenue and double-digit percentage growth in loyalty and third-party maintenance revenue.

Net income attributable to shareholders increased to $1.44 billion ($2.21 per share) during the quarter ended on June 30th from $1.04 billion ($1.49 per share) in the same period a year ago.

Earnings per share, which exclude special items, were reported at $2.35 during the latest quarter. The figure compares with a consensus of estimates pointing to adjusted earnings of $2.28 per share.

The second-largest air carrier in the United States said that it had generated $3.3 billion of operating cash flow and $1.8 billion of free cash flow during the past quarter, after investing as much as $1.4 billion in the business (mostly for plane purchases and improvements).

Meanwhile, the company returned $497 million to shareholders during the quarter, including share repurchases of $268 million and dividends of $229 million.

Delta Air also revised up its full-year 2019 earnings forecast to a range of $6.75 to $7.25 per share from a range of $6.00 to $7.00 per share, as expected previously.

“With record passenger loads, customer satisfaction and $1 billion in revenue growth for the June quarter, demand for Deltas customer-focused product and service has never been stronger. Our third quarter is off to a great start with a new highest revenue day on record on July 7th,” Glen Hauenstein, Delta Airs President, said in a statement.

“We now expect revenue growth of six to seven percent for the year, a $3 billion increase over 2018, as we benefit from our multi-year pipeline of fleet, product, and loyalty initiatives,” Hauenstein also said.

Analyst stock price forecast and recommendation

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Delta Air’s stock price, have a median target of $70.00, with a high estimate of $90.00 and a low estimate of $60.00. The median estimate represents a 16.36% upside compared to the closing price of $60.16 on July 11th.

The same media also reported that at least 13 out of 22 surveyed investment analysts had rated Delta Air’s stock as “Buy”, while 7 – as “Hold”.

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