The Wall Street Journal - Delta Air Lines Inc.'s fourth-quarter net loss widened on more than $900 million in stock-compensation costs and fuel-hedging losses.
Chief Executive Richard H. Anderson said, "Despite the difficult economic environment, we expect to be solidly profitable in 2009 driven by lower fuel costs, capacity discipline and merger synergies."
Delta, now the world's largest airline by passengers after its October merger with Northwest Airlines, posted a net loss of $1.44 billion, or $2.11 a share, compared with a year-earlier net loss of $70 million, or 18 cents a share. Excluding items such as $900 million in employee equity awards and fuel hedging, the latest quarter's loss would have been 50 cents.
Revenue jumped 43% to $6.71 billion. Assuming the merger was completed before the year-earlier quarter, revenue dipped 0.3% to $7.77 billion. Analysts surveyed by Thomson Reuters expected a loss of 34 cents on revenue of $7.99 billion.
Mr. Anderson said earlier this month that the global economic slowdown won't alter Delta's expectations from its purchase of Northwest. Anderson said the airline continues to aim to generate $2 billion of annual cost cuts by 2012 through steps such as optimizing combined fleets.
Mainline revenue passenger miles, or one paying passenger flown one mile, dropped 3.1% in the latest quarter, as capacity declined 4.2%.Delta, along with other carriers, has been cutting U.S. capacity -- eliminating some of its less-traveled routes -- as part of a plan to cut costs. The company said it would cut capacity by 6% to 8% in 2009 as the global recession continues to weaken demand for air travel.
Looking ahead, Delta expects first-quarter mainline capacity to be down 6% to 8%, down 13% to 15% in the U.S. and flat to up 2% internationally. The company projects fuel costs averaging $2.34 a gallon for the quarter and $2.15 for the year.http://online.wsj.com/article/SB123298393968415759.html?mod=article-outset-box
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