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Delta Airlines The company on Tuesday raised its second-quarter forecast to see full-year adjusted earnings per share of $6, up from an April forecast last year, as strong travel demand and upgrades to more expensive fare categories continued to drive growth. upper limit.
Delta expects adjusted earnings per share of $2.25 to $2.50 for the second quarter, up from its previous range of $2 to $2.25 per share. Chief Executive Ed Bastian said the company’s second-quarter earnings, due to be reported next month, are likely to be the highest for the April-June period.
In a presentation ahead of its investor day later Tuesday, the airline also raised its forecast for free cash generation this year to $3 billion from $2 billion. Delta Air Lines reinstated its quarterly dividend earlier this month.
“As you know, anyone who’s traveled knows, this demand has gone off the chain,” Delta Air Lines CEO Ed Bastian told CNBC’s “Squawk Box.” .”
Delta and its rivals reported strong demand for travel, especially international travel, while other industries struggled as consumers grapple with inflation and other challenges. The industry is also facing growth constraints due to a shortage of air traffic controllers, delays to new planes and a shortage of new pilots, keeping fares firm.
But in addition to strong demand, airlines are enjoying jet fuel prices that are about 30% lower than a year ago.
Delta predicts that revenue per available seat mile, a measure of how much an airline flies, will rise 18% from last year, up from a previous forecast of 15% to 17% growth.
Shares of Delta Air Lines rose more than 2% in premarket trading Tuesday.