Delta’s 2Q profit rises despite a dip in revenue

But the airline giant’s results were not as good as they could have been – and its guidance was subpar, too.

However, revenue slipped 2 percent to $10.45 billion, below the analysts’ forecast of $10.48 billion.

Delta Air Lines, Inc. shares are now 24.56% away from the 52 week low.

Zacks Rank: Currently, Delta Air Lines has a Zacks Rank #5 (Strong Sell) but that could change following the company’s earnings report which was just released. System Capacity is expected to increase 1 percent to 2 percent from the prior year.

Delta Air Lines, Inc provides scheduled air transportation for passengers and cargo throughout the United States and around the world. In the second quarter the company paid $103 million in dividends and repurchased $1 billion in stock. This pulled $455 million of hedging losses forward into Q2.

Adjusted to include mark-to-market impacts, fuel cost averaged $1.97 a gallon, a drop of $0.43 a gallon year over year but up by $0.61 per gallon sequentially. Passenger Revenue per available seat mile (PRASM) decreased in all regions: Domestic PRASM decreased 5.6% year-over-year, PRASM in transatlantic market dropped 4.4%, PRASM in transpacific market dropped 5.1%, and in Latin America, PRASM decreased 4.9%. The company posted revenue of $10447.00 million in the period, compared to analysts expectations of $10479.70 million. Image source: The Motley Fool.

CEO Ed Bastian said: “The Delta people again delivered another quarter of solid profitability, superior operational performance and great customer service, continuing to strengthen our brand and our foundation for the future”.

Much of the weaker pricing is coming in last-minute, so-called walk-up fares that usually carry higher prices.

Delta making seasonal capacity adjustments this winter, especially in United Kingdom due to #Brexit uncertainty.

Delta’s worldwide performance wasn’t much better. That is compared with the $1.27 in earnings per share it reported during the same period past year.

More capacity cuts: will they work? Other adjustments were also lower this year. (NYSE:DAL) reached at $39.56 price level during last trade its distance from 20 days simple moving average is 6.41%, and its distance from 50 days simple moving average is -1.96% while it has a distance of -13.37% from the 200 days simple moving average.

The company said it expected an operating profit margin of 19 percent to 21 percent for the third quarter.

Year-to-date, shares of Delta Air Lines, Inc.

Further, Delta said it has chose to reduce 6 points of U.S. -U.K. capacity from its winter schedule amid the additional foreign currency pressure from the steep drop in the British pound and the economic uncertainty from Brexit. This comes on top of other capacity actions Delta announced in May.