Boosted by operating margins that are anticipated to reach the top of the previously guided 9-11% range, Delta Air Lines now expects adjusted earnings per share to reach a range of $1.35-$1.40 as compared to a previously forecasted range of $1.00-$1.25.
“Demand for air travel remains robust as we exit the year and Delta’s momentum is building,” Delta Air Lines CEO Ed Bastian said in a statement ahead of an investor relations event featuring Bastian and other executives in New York. “Our 2023 outlook for 15 to 20 percent revenue growth over 2022 and margin expansion support a near doubling of EPS to $5 to $6 per share, keeping us on track for our 2024 earnings target of over $7 per share.”
Delta stock popped in premarket trading on the news.
While the company raised its EPS expectations, revenue guidance was narrowed.
Delta now expects adjusted operating revenue of roughly $12.3 billion for its December quarter, which reflects a growth range of 7-8% versus 2019 results. The latest update came in below the top end of the original revenue forecast for the final three months in 2022, which anticipated growth in the range of 5-9%.
Delta Air Lines also provided a glimpse of its ongoing efforts to re-establish pre-pandemic capacity.
The company is reaffirming its target to fully restore its network in 2023. At the end of its September quarter, management expected to operate the airline at 92% of the comparable 2019 capacity by the end of the three month period encompassing the holiday travel season.
As summer is typically its busiest period, achieving full capacity restoration by mid-2023 may alleviate some airport frustration felt by passengers across airline experiences during the summer of 2022.
CEO Bastian and Chief Financial Officer Dan Janki will speak with shareholders about the airline’s aim to propel the company from 7.7% operating margins in 2022 towards 10-12% in 2023 and 13-15% by 2024.
