Delta Air Lines, Inc. ($DAL) Earnings (Q1 FY22)

 Delta Air Lines, Inc. ($DAL) Earnings and Opinion:


Delta Air Lines is a company in the Industrials sector and operates in the Airlines industry. The company provides air transportation for passengers and cargo in the United States and Internationally. Delta was founded in 1924 and is currently headquartered in Atlanta, Georgia. The company made its debut on the stock market in 2007.

Delta Air Lines EPS and Revenue (Q1 FY22):

  • EPS of -$1.23 beating expectations of -$1.27
  • Revenue of $9.3B beating expectations of $9.01B
  • Revenue was down 11% from 2019 levels
Delta Air Lines Q1 Highlights:
  • Adjusted operating revenue of $8.2B, 79% recovered from 2019
  • Generated $1.8B in operating cash flow and $197M in free cash flow
  • $12.8B in liquidity 
Delta Financial Outlook (Q2 FY22):
  • 84% recovered from 2019 levels
  • Revenue of 93-97% of 2019 revenue levels
  • Operating margin of 12-14%
Opinion:
Delta Air Lines is currently moving higher in todays trading session, and bringing most other popular airline stocks with it. The company posted some quality numbers and beat earnings in both the EPS and Revenue aspects. Delta reported earnings using 2019 levels as its basis, this is due to the fact that airline travel has been very slow from Covid. The company, like many other companies is working on getting back to pre-pandemic levels, so it makes sense for them to compare financial statements back to 2019 levels, where operations were "normal". Another important to take away from this report is the fact that the company expects to return back to a profit in the next quarter. I think a lot of consumers are fed up with not being able to travel and are looking for a getaway. This is causing airlines to return back to normal profit levels, but we also have to factor in the costs of them doing business as well. A lot of airline companies are dealing with staff shortages right now and increasing operating costs (fuel, etc.). This is causing airfares to rise to higher levels, but consumers are still looking for that sense of traveling. It will be interesting to see how well Delta and other airliners can perform in this next quarter. Looking at the valuation side of things, Delta looks to be higher in valuations compared to industry competitors. The company is currently undervalued and has some room to grow as it is heading back to profitability. Personally, I do not think this is that bad of a play. I think the airlines industry has room to grow overall, just because they hit a pretty big low during the pandemic and are currently almost fully back to normal operation. Delta is a pretty solid stock, but if you're looking for income from an airliner, I would check out United Air Lines ($UAL)


*Information from Yahoo Finance, Delta Air Lines, and Nasdaq
*Estimates from Zacks

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