Delta Air Lines, Inc.(NYSE: DAL) stock rose over 1.5% in the pre-market session on October 11th, 2017 (as of 8:06AM EDT; Source: Google finance) post their decent third quarter of 2017 results. DAL stock rallied over 11.1% in the last four weeks leading to a total rally of over 17.2% in the last six months. They delivered $769 million to shareholders, with $550 million of share repurchases and paid $219 million in dividends. They finished the $5 billion share repurchase authorization in 2015 during the September quarter. Their December quarter purchases would be made under their 2017 $5 billion share repurchase authorization.
The group’s operating revenue rose 5.5% yoy to $11.1 billion during the September quarter. Passenger revenue surged $328 million, including $160 million from the group’s Branded Fares initiatives. The group’s Passenger unit revenues surged 1.9% on 1.6 percent higher capacity. Their Cargo revenue enhanced 11.5% boosted by better volumes in freight and mail. Despite facing hurdles like hurricanes and an earthquake in Mexico, the group was able to generate a decent quarter performance. The group is undertaking a series of initiatives to enhance their earnings and margins.
The group sees an ongoing opportunity in business yields while forecast their fourth quarter unit revenues to rise in the range of 2% to 4% with all entities in positive territory by the year-end. They forecasted their operating margins to be in the range of 11% to 13% while expecting their fuel price to be in the range of $1.82 to $1.87.
The group focused on customer innovation while continued to target positive unit revenue. They invested over $1 billion into the business for buying aircrafts and making enhancements, facilities upgrades, and technology. They used $175 million to finish their 49% ownership of Aero Mexico.
Delta generated $1.6 billion of operating cash flow and $471 million of free cash flow during the quarter. On the other hand, their adjusted pre-tax income fell $182 million to $1.7 billion during the September 2017 quarter as compared to the same period last year.