The hiring spree is adding to investors’ fears about rising costs at the carrier. Excluding fuel, spending per seat rose 2.4 percent in the third quarter, but Delta sees that jumping to between 4 percent and 5 percent in the fourth quarter, resulting in earnings per share of $1.20 to $1.50. Analysts were expecting $1.51 per share.
Atlanta-based Delta has been the most profitable U.S. airline in recent years, and it regularly beats its closest rivals for fewer flight delays and cancellations. This year it has benefited from the grounding of the Boeing 737 Max. Delta doesn’t own any, but American, United and Southwest do, and they have been forced to cut thousands of flights from their schedules.
For the quarter ended Sept. 30, Delta earned about $173 million more than in the same period last year. Excluding what it considers non-repeating gains and losses, Delta earned $2.32 per share, 5 cents better than the average forecast of analysts surveyed by Zacks Investment Research.
Revenue rose 5 percent to $12.56 billion, slightly less than what analysts expected.
Spending on wages and benefits rose 5 percent, or $131 million, but that was more than offset by a drop in fuel spending of 10 percent, or $259 million, compared with a year earlier.
Delta did best at home. U.S. revenue rose 7.8 percent as the carrier added flights and appeared to charge higher prices — about 3 percent more for every seat on a per-mile basis. The carrier showed rising revenue on flights to Europe and South America, but its Asia business declined.
— Associated Press
LVMH is less affected by Hong Kong unrest
A strong sales update from LVMH boosted stocks across the luxury goods sector on Thursday, as months of unrest in Hong Kong proved less of a drag on the Louis Vuitton owner in the third quarter than expected.
Luxury labels rely on Hong Kong as a magnet for travelers and shoppers across Asia, and several months of pro-democracy protests have forced some retailers to close their doors temporarily.
In the first real glimpse of the impact across the sector, LVMH said revenue was down roughly 25 percent from July to September in Hong Kong. Analysts had projected industry sales there could be halved.
But the French conglomerate, which owns labels including Christian Dior, Hublot watches and Krug champagne, also cautioned that the demonstrations would affect margins in what is usually a highly profitable market.
And the group said the fallout was not yet over, as store closures had stretched into October.
Helped by a booming fashion and handbag division — home to Vuitton and Dior — LVMH shrugged off much of the hit from Hong Kong, with a strong performance in the rest of Asia, Europe and the United States, and third-quarter sales beat forecasts.
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— From news services