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Delta Reports Strong Q2 Profits on Domestic Demand

Skift Take

Delta is the first U.S. airline to report Q2 profits, which will be bolstered by a return in leisure and business demand throughout the U.S.

— Samantha Shankman

Delta Air Lines Inc. posted second- quarter profit that beat analysts’ estimates as the U.S. carrier benefited from strong domestic demand.

Earnings excluding some items were $1.04 a share, the Atlanta-based company said in a statement today. The average of 17 estimates compiled by Bloomberg was $1.03. Revenue rose 9 percent to $10.6 billion.

Delta is the first U.S.-based carrier to report earnings for the traditionally strong second quarter. Analysts expect the six biggest airlines to report $3.76 billion in combined profit excluding special items, estimates compiled by Bloomberg show, up 61 percent from the $2.34 billion reported a year earlier.

The shares rose 1.2 percent to $38.15 at 7:37 a.m. in New York. They had advanced 37 percent this year through yesterday.

Shares of U.S. carriers fell on July 2 after Delta said that day that excess capacity in some international markets forced fares down more than expected. Delta’s comments at the time built on concern raised in June when Germany’s Deutsche Lufthansa AG of Germany lowered its full-year earnings forecast. Air France-KLM Group later in July trimmed its profit outlook.

Michael Derchin, an analyst at CRT Capital Group in Stamford, Connecticut, said this week that investors overreacted to the news, because U.S. airlines are less vulnerable to competition from fast-growing Middle Eastern airlines than their European rivals.

American Airlines Group Inc., United Continental Holdings Inc., Southwest Airlines Co., JetBlue Airways Corp. and Alaska Air Group Inc. are scheduled to report results tomorrow.

To contact the reporter on this story: Michael Sasso in Atlanta at msasso9@bloomberg.net To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net James Callan, Niamh Ring.

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