Delta Air Lines, Inc. (NYSE: DAL) announced its financial results for the December 2016 quarter, and for the full year 2016. Delta had reported a 37 percent decline ine fourth-quarter net profit and forecast passenger unit revenue, a closely watched metric, to be flat to up 2 percent in early 2017.
For the December quarter, net income dropped 37% to $622 million from $980 million in the same period last year, and the company reported earnings per share of $0.82, excluding certain items, which is in line with analysts’ estimates. The decline of profits was due to the agreement with 13,000 pilots, which promised them to get a 30% raise by 2019. In the statement, the company also announced that the operating revenue declined to $9.46 billion from $9.5 billion, which slightly surpassed previous expectations of $9.4 billion. Passenger unit revenues dropped 2.7%, while capacity increased 0.9% in the December quarter.
“Delta had a year of record-breaking performance in 2016 – financially, operationally and for our customers – and it’s an honor to recognize our employees’ efforts this year with over $1 billion in profit sharing,” Ed Bastian, the chief executive officer of Delta, said in the statement.
“As we move into 2017, we are seeing our unit revenues turn positive which should return the company to margin expansion by the back half of the year. This will allow us to produce the solid returns and cash flows that investors rely upon from Delta,” he added.
For the full year 2016, net income for the company was $4,373 million, decreasing from the $4,526 million in the same period last year. Diluted earnings per share was $5.79 per share, compared to the $5.63 per share in 2015.
Based on the results, the company announced the guidance for March 2017 quarter. In the next quarter, the company expected the operating margin to be between 11% and 13%, and passenger unit revenue will be up 0% to 2% compared with that of 2016. In addition, the company expected that the margin pressure might reach peak in the March quarter, and it is expected that the margins will start to expand in the second half of 2017.