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Delta Reports Q3 2009 Results  
User currently offlinePanamair From United States of America, joined Oct 2001, 4910 posts, RR: 25
Posted (4 years 11 months 4 hours ago) and read 8648 times:
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Operating Revenues: $7.6 billion
Net Loss: $161 million (including $212 of special items)
Net Profit (excluding specials): $51 million
Net Margin: -2.1%
Net Margin (excluding specials): +0.7%

Operating Profit: $204 million
Operating Profit (excluding specials): $333 million
Operating Margin: +2.7%
Operating Margin (excluding specials): +4.4%

Unrestricted liquidity at Sep 30 2009: $5.8 billion

http://finance.yahoo.com/news/Delta-...ts-prnews-3816099651.html?x=0&.v=1

91 replies: All unread, showing first 25:
 
User currently offlinePHBUF From Netherlands, joined Mar 2009, 239 posts, RR: 0
Reply 1, posted (4 years 11 months 4 hours ago) and read 8641 times:

Ehm..that's a lot of numbers and I'm not exactly an expert..but this is good right?

User currently offlineAirbuske From United States of America, joined Jun 2007, 466 posts, RR: 0
Reply 2, posted (4 years 11 months 4 hours ago) and read 8601 times:



Quoting PHBUF (Reply 1):
Ehm..that's a lot of numbers and I'm not exactly an expert..but this is good right?

I'm as puzzled as you.

"Our ability to earn a profit for the quarter shows we are making sound decisions for our business in this difficult economic environment. While we now see encouraging revenue and booking trends, we remain cautious in these early stages of an uncertain recovery," said Richard Anderson, Delta's chief executive officer. "My thanks go out to the Delta people who delivered great customer service, ran a solid operation, and moved forward with our merger integration, all against the backdrop of a very challenging economy."

http://news.delta.com/index.php?s=43&item=777

Delta earned a profit for the quarter yet they made a net loss of $161 million. I don't get that.


User currently offlinePHBUF From Netherlands, joined Mar 2009, 239 posts, RR: 0
Reply 3, posted (4 years 11 months 4 hours ago) and read 8587 times:



Quoting Airbuske (Reply 2):
Delta earned a profit for the quarter yet they made a net loss of $161 million.

I guess that's because of the 'special items' , whatever they may be..maybe merger costs or something like that? Can anybody clarify what these 'special items' are?


User currently offlinePanamair From United States of America, joined Oct 2001, 4910 posts, RR: 25
Reply 4, posted (4 years 11 months 3 hours ago) and read 8525 times:
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Special items are one-time items that are not a 'normal' part of the business.

From the news release,

"...Delta recorded special charges totaling $212 million in the September 2009 quarter, including:


$83 million to write-off unamortized non-cash debt discount associated with the refinancing of certain Northwest debt;
$78 million in merger-related items; and
$51 million in charges for employee severance programs. "

FYI, the last two items ($78m and $51m) were included in the Operating Expenses section and reflected in the Operating Profit of $204 million (including specials)
The first item of $83 million was included in the non-operating expenses section.


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5433 posts, RR: 7
Reply 5, posted (4 years 11 months 3 hours ago) and read 8464 times:



Quoting PHBUF (Reply 1):
but this is good right?

Whether it's good is debatable. It could have been worse but it certainly could have been better. One of the good things: CASM ex-fuel and specials 7.82 cents, only a slight rise from last year, meaning they are running a good operation. One of the bad things: 21% decline in revenue, which isn't a lot off the industry average but it means the merger so far isn't generating the expected new revenue.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineLAXintl From United States of America, joined May 2000, 25352 posts, RR: 49
Reply 6, posted (4 years 11 months 3 hours ago) and read 8463 times:

Bottom line = they lost $161mil for the quarter


From the desert to the sea, to all of Southern California
User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 7, posted (4 years 11 months 3 hours ago) and read 8378 times:

Did I read that right that DL has 5.8 billion dollars '"on hand"(cash)?
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlinePanamair From United States of America, joined Oct 2001, 4910 posts, RR: 25
Reply 8, posted (4 years 11 months 3 hours ago) and read 8380 times:
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Quoting MasseyBrown (Reply 5):
but it means the merger so far isn't generating the expected new revenue.

Not unexpected as mentioned in the conf call, due primarily to CRS not being integrated yet and not running on a single technology platform yet...


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6608 posts, RR: 24
Reply 9, posted (4 years 11 months 3 hours ago) and read 8289 times:



Quoting Panamair (Reply 8):
Not unexpected as mentioned in the conf call, due primarily to CRS not being integrated yet and not running on a single technology platform yet...

But not consistent with previous declarations (in 2008) that talked about significant revenue synergies being realized in 2009...despite knowing that the CRS/IT switchover's wouldn't occur until late 09.

DL's numbers are solid, but they aren't the industry changing type numbers some DL cheerleaders have been boasting about.


User currently offlineJetlanta From United States of America, joined Jul 2001, 3297 posts, RR: 35
Reply 10, posted (4 years 11 months 2 hours ago) and read 8251 times:



Quoting FlyPNS1 (Reply 9):
But not consistent with previous declarations (in 2008) that talked about significant revenue synergies being realized in 2009...despite knowing that the CRS/IT switchover's wouldn't occur until late 09.

DL's numbers are solid, but they aren't the industry changing type numbers some DL cheerleaders have been boasting about.

I think the revenue synergy's have not come as quickly as they anticipated due to issues like the CRS. They thought that blanket codeshares would take care of that, but it turns out that it hasn't worked out that way. Some assumptions were a bit off, in other words. Its gonna happen in a transaction like this.


User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9400 posts, RR: 14
Reply 11, posted (4 years 11 months ago) and read 8039 times:

Also want to note. They(not sure who, cant tell) said they plan to pull 100 50 seaters by the end of 2010 and they said the SF3 should be gone in, no more, than 3 years.


yep.
User currently offlineATLFlyer323 From United States of America, joined Jan 2005, 615 posts, RR: 0
Reply 12, posted (4 years 11 months ago) and read 7962 times:



Quoting DeltaL1011man (Reply 11):
and they said the SF3 should be gone in, no more, than 3 years.

What is the SF3?

Thanks,
Brandon



Everyday, the fluffy temptation of wheat!
User currently offlineFlyIGuy From United States of America, joined Feb 2004, 1113 posts, RR: 0
Reply 13, posted (4 years 11 months ago) and read 7958 times:



Quoting ATLFlyer323 (Reply 12):
What is the SF3?

The SAAB 340 flown my Mesaba as Northwest Airlink.

Just my 0.02



The opinions I post are of mine and mine alone, not of the airline I work for.
User currently offlineDrerx7 From United States of America, joined Jun 2000, 5190 posts, RR: 8
Reply 14, posted (4 years 11 months ago) and read 7957 times:



Quoting ATLFlyer323 (Reply 12):
What is the SF3?

Saab 340s



Third Coast born, means I'm Texas raised
User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9400 posts, RR: 14
Reply 15, posted (4 years 11 months ago) and read 7914 times:



Quoting ATLFlyer323 (Reply 12):

http://www.airliners.net/photo/Delta...-(Mesaba/Saab-340B-Plus/1538292/M/



yep.
User currently offlineATLFlyer323 From United States of America, joined Jan 2005, 615 posts, RR: 0
Reply 16, posted (4 years 10 months 4 weeks 1 day 22 hours ago) and read 7776 times:

lol, thanks.

And DeltaL1011man, I didn't need a pic I know what a SAAB 340 looks like! (I drive a Saab for crying out loud!) But I appreciated the pic anyways.  Smile

Thanks,
Brandon



Everyday, the fluffy temptation of wheat!
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 17, posted (4 years 10 months 4 weeks 1 day 22 hours ago) and read 7727 times:



Quoting MasseyBrown (Reply 5):
Whether it's good is debatable. It could have been worse but it certainly could have been better. One of the good things: CASM ex-fuel and specials 7.82 cents, only a slight rise from last year, meaning they are running a good operation. One of the bad things: 21% decline in revenue, which isn't a lot off the industry average but it means the merger so far isn't generating the expected new revenue.

When you consider that the next closest airline in size which is about 40% smaller reported a loss much larger than DL, DL's results are indeed quite good compared to its peers.

There is clearly more revenue work to be done as Jetlanta points out...but I would also assert that revenue synergies are alot harder to pull off when there is a very weak revenue environment to begin with.

The 2010 int'l schedule shows that revenue integration will be closely tied to reallocation of routes and that wasn't possible in 2009 because of revenue weakness.


User currently offlineNWAESC From United States of America, joined Aug 2007, 3389 posts, RR: 9
Reply 18, posted (4 years 10 months 4 weeks 1 day 21 hours ago) and read 7686 times:



Quoting MasseyBrown (Reply 5):
One of the bad things: 21% decline in revenue,

The 51% decline in cargo revenue was a bummer as well (though not surprising)...

Quoting Isitsafenow (Reply 7):
Did I read that right that DL has 5.8 billion dollars '"on hand"(cash)?
safe

Yes.

Quoting DeltaL1011man (Reply 11):
they said the SF3 should be gone in, no more, than 3 years.

BRING BACK THE DASH-8!!!  Smile



"Nothing ever happens here, " I said. "I just wait."
User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9400 posts, RR: 14
Reply 19, posted (4 years 10 months 4 weeks 1 day 21 hours ago) and read 7602 times:



Quoting NWAESC (Reply 18):
BRING BACK THE DASH-8!!!

sounds like a good idea to me.



yep.
User currently offlineMSPNWA From United States of America, joined Apr 2009, 1944 posts, RR: 2
Reply 20, posted (4 years 10 months 4 weeks 1 day 17 hours ago) and read 7416 times:

Eh, middle of the road I would say. Revenue not good, overall not bad. Too bad we have to sift through all the "special items" now when reading an airline's financial report. Is this going to be a common practice from now until eternity?

Quoting WorldTraveler (Reply 17):
When you consider that the next closest airline in size which is about 40% smaller reported a loss much larger than DL, DL's results are indeed quite good compared to its peers.

I don't think DL will be or should be receiving any "moral victories" because of their size. You could say they wanted to be in this position. They now need to use it to their advantage.


User currently offlineNwarooster From United States of America, joined Feb 2005, 1088 posts, RR: 3
Reply 21, posted (4 years 10 months 4 weeks 1 day 17 hours ago) and read 7416 times:
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Quoting Isitsafenow (Reply 7):
Did I read that right that DL has 5.8 billion dollars '"on hand"(cash)?
safe

Delta may have 5 Billion dollars in unrestricted cash. but Delta has about 15 Billion dollars in debt.

Quoting DeltaL1011man (Reply 11):
Also want to note. They(not sure who, cant tell) said they plan to pull 100 50 seaters by the end of 2010 and they said the SF3 should be gone in, no more, than 3 years.



Quoting FlyIGuy (Reply 13):


Quoting ATLFlyer323 (Reply 12):
What is the SF3?

The SAAB 340 flown my Mesaba as Northwest Airlink.

The SAAB 340 is one aircraft that should be kept as it fills in an important niche.  old 


User currently offlineBobnwa From United States of America, joined Dec 2000, 6471 posts, RR: 9
Reply 22, posted (4 years 10 months 4 weeks 1 day 9 hours ago) and read 6839 times:



Quoting Nwarooster (Reply 21):
Delta may have 5 Billion dollars in unrestricted cash. but Delta has about 15 Billion dollars in debt.

Show me a US airline(with the possible exception of WN) that doesn't have significant debt. Also the unrestricted cash on hand is largely borrowed. The financial picture of the airlines is not a pretty picture anywhere in the world.


User currently offlineEMB170 From United States of America, joined Nov 2007, 648 posts, RR: 0
Reply 23, posted (4 years 10 months 4 weeks 1 day 7 hours ago) and read 6571 times:



Quoting Nwarooster (Reply 21):
The SAAB 340 is one aircraft that should be kept as it fills in an important niche

I'm guessing that DL/NW is finding that the small stations that the SF3 serves are becoming harder and harder to make turn a profit...Problem is, the aircraft themselves aren't made anymore (which means spare parts become more difficult to find), and these aircraft frequently get put into SCASD or EAS markets where the subsidy is only guaranteed for a fixed amount for a couple of years...what if the cost of fuel goes up? What if the traffic demand just is not there anymore?

I'm thinking this is why XJ is giving up some EAS markets in northern Michigan to OO/UA to run with Brasilias.



Can passenger jets fly as fast as my feet do? Let's find out...
User currently offlineJetlanta From United States of America, joined Jul 2001, 3297 posts, RR: 35
Reply 24, posted (4 years 10 months 4 weeks 1 day 7 hours ago) and read 6516 times:



Quoting EMB170 (Reply 23):

I'm guessing that DL/NW is finding that the small stations that the SF3 serves are becoming harder and harder to make turn a profit...Problem is, the aircraft themselves aren't made anymore (which means spare parts become more difficult to find), and these aircraft frequently get put into SCASD or EAS markets where the subsidy is only guaranteed for a fixed amount for a couple of years...what if the cost of fuel goes up? What if the traffic demand just is not there anymore?

Yeah. The real problem is that many of these small markets were never that great. At the fuel prices we've been at for a couple years now, they are simply no longer economical. It is a harsh reality, but one we have to deal with as long as we are dependent on a scarce resource.


25 WorldTraveler : And they will use it to their advantage... that's why factors like margin are relevant regardless of size... and DL did well on that basis. Being hug
26 Cubsrule : Is Delta's financial performance - when it is admittedly still in the midst of merger integration - relevant? Delta states that it is realizing the m
27 WorldTraveler : absolutely true... but the reality is that in the US, Wall Street expects merger costs and benefits to be a part of how a company operates NOW. There
28 Cubsrule : Obviously, they have to report the results, and to the extent possible, they ought to manipulate them to make them look good. But you and I aren't Wa
29 Tommytoyz : Financial performance is always relevant, period. Especially in this case if you consider that this is a merger of two new companies that emerged fro
30 MasseyBrown : Downsizing is very difficult for DL to do, given their tangible asset/debt ratio (0.6 as of the June 10Q) . They really, really want to fly their way
31 AirNz : May I say a great post, and one which I completely agree with. This is what I've been saying for a while, and currently on another thread, but nowher
32 Cubsrule : There's no moral problem with actions like shifting specials a few quarters; DL could have taken all or almost all merger-related specials immediatel
33 WorldTraveler : vs. just sitting on the sidelines and giving up? DL's financial ratios are not significantly different from any other carrier in the US industry. No
34 MasseyBrown : No, versus capacity reduction that addresses their bloated fleet numbers. DL's tangibles/debt ratio is MUCH worse than the other legacies because of
35 WorldTraveler : you can stop right there... by every earnings related metric, DL outperformed AA and most other US network airline peers in the most recent quarter.
36 FlyPNS1 : DL's revenue numbers don't support this claim. DL is surviving based on its lower costs and nothing more.
37 LipeGIG : But this was because of a special charge. In the end DL has managed to obtain positive operational result, or in other words, they're profitable on t
38 AirNZ : They might well be but, whatever the reason, the still posted a $161 million loss. One can twist and spin it any way one wishes (and I don't mean you
39 Surfdog75 : Admittedly no accountant here but I saw a much bigger company than its competitors, in the midst of a very expensive merger where everything is being
40 MasseyBrown : Except for factual tangibles/debt ratios, I made no comparison of DL to other airlines. I simply pointed out the unique-among-legacies set of the cha
41 Tommytoyz : That's no excuse what so ever. By that standard, who was better managed, GM or Chrysler?
42 WorldTraveler : Which is why DL recognizes that they need to get some of the debt down; apparently the only major significant new expense will be a JFK terminal and
43 Tommytoyz : Wall street is not main street. If a company is in a race to the bottom or BK (again) against others in the "peer group" what does that do in the rea
44 WorldTraveler : Your passion is admirable but the reality is that DL is viewed favorably on Wall Street compared to its peers; and regardless of the industry, the "ex
45 Cubsrule : Can they? How can they shrink with the debt burden they have?
46 United1 : They can't...it's been said before by those "experts" on Wall Street that DL has no choice but to expand in oder to support its debt load.
47 MasseyBrown : They could do some sales if they have assets with a book value at or below market value. In a small amount, they could pull it off. Big sales no. But
48 WorldTraveler : no US airline can shrink and remain profitable.... there is not a single instance of a US airline shrinking to profitabilty. DL is far from in the sa
49 Cubsrule : F9? They were aided by Chapter 11, of course, but they shrank and reduced CASM.
50 FlyPNS1 : You might want to let DL's management know this. They've been shrinking DL for quite some time and have plans to continue shrinking it in the future.
51 Post contains links Tommytoyz : I really don't think you know what you're talking about. Investors decide whether or not to invest in a business. They want a return, as does any Wal
52 WorldTraveler : C11 is an artificial process to reduce costs... it obviously cannot be done w/ any regularity. Every airline can shrink to a certain extent - as ever
53 MasseyBrown : Nonsense, not even the unions really believe that. TWA did it in the 60's. Eastern did it in the 80's. CO did it in the 90's. This last quarter UA co
54 Tommytoyz : I admire your enthusiasm, and I'm sure your heart is in the right place. But you show you don't yet understand what makes the clocks tick. The above
55 WorldTraveler : And those airlines obtained success how? Their absence speaks volumes about how successful their downsizing was. With two bankruptcies... Again, ever
56 Tommytoyz : What is your experience negotiating contracts? I have years of experience doing so. In order to amend a contract, at the very least you have to be a
57 LipeGIG : They just need to reduce the cost of their debt. Seems that some of their debt are too expensive (i.e. higher interest rates) but of course, is not s
58 WorldTraveler : again, highly theoretical but doesn't hold true in reality. If you don't think investors don't have the ability to assist in reducing costs on behalf
59 Tommytoyz : I am not singling DL out nor didI say they are doing a worse job than others. This is misleading. You seem to have a persecution complex. The new DL
60 Cws818 : CO's first bankruptcy was in 1983 and, consequently, had little to do with its successful shrinkage in the 1990s.
61 Post contains links LAXintl : Go tell that to Atlas Air. Has seen its fleet shrink from 42 frames to 28 -- Yes revenue dropped 45%, but cost dropped 49% as of last quarter and hea
62 Post contains links Tommytoyz : And also Alaska http://portland.bizjournals.com/port.../2009/10/19/daily40.html?ana=yfcpc Here's also another good writeup comparing airlines with ea
63 MaverickM11 : Only one legacy carrier has grown their mainline ASMs over the past decade, and it's not DL. Everyone else has shrunk. That explains a *LOT*
64 Styles9002 : A net loss is still a net loss. Special items are mostly accounting measures and one should not be surprised to see how frequently 'special items' rec
65 Panamair : Here are the Operating and Net Margins for comparison purposes across the Top 6 US carriers for Q3 2009 (5 legacies + Southwest): Operating Margin (no
66 Tommytoyz : 1. Only AMR is a legacy carrier. The others are new companies with cleaned balance sheets and contracts through BK court. DL is one of these new comp
67 Sxf24 : According to GAAP, operating profit excludes interest income and expense and other non-operating items like those you've listed. Operating profit is
68 Panamair : Misleading? Hello, Accounting 101. GAAP Operating Profit is SUPPOSED to be simply Operating Revenues minus Operating Expenses. Interest Expenses are
69 Post contains images DeltaL1011man : So does anyone want to bet that Delta wont make any(or very much) money till after 2012? I figure they will find a way to show a loss till after the D
70 Bobnwa : Yes you have a bet. Do you really think the leadership of DALPA is not intelligent enough to see the real numbers and what they mean? Are you implyin
71 DeltaL1011man : Was a joke, hints the And BTW, Wouldn't matter if DL is making money, Leo Moak does a good job of killing the pilots. But this isn't the place.
72 WorldTraveler : DL and every other airline did not fire all of their senior employees or get rid of their old, maintenance heavy aircraft, or get rid of all of their
73 Tommytoyz : To Panamair I looked at the other 10Q filings from other airlines and you are correct, I was wrong. Sorry about that. Though I find that operating nu
74 Cubsrule : But fuel hedging is like that too - much of the accounting in the airline industry is divorced from reality. It's not a bad thing (as it does help to
75 Panamair : No worries. That's why I always try to post both Operating and Net numbers, as well as excluding specials versus inclusive. The point is that to prop
76 Tommytoyz : It is a bad thing, because it leaves out critical moving parts. GAAP net income is the metric to use to compare how all the many decisions and moving
77 Cubsrule : There is that risk. But if the interest that net keeps but operating throws out is interest on airplanes (and some of it is), it's tough to argue tha
78 Panamair : But not including interest expense as part of Operating Results is not an airline-specific accounting phenomenon. It's basic Accounting 101 Income St
79 Cubsrule : I've not argued otherwise (to either of these points). I'm simply pointing out that the net figure, while certainly helpful, is not the end all be al
80 Tommytoyz : While GAAP may allow certain subcategories, and management can point those out, only the net income reflects all categories. GAAP does not allow excl
81 Panamair : The problem with Net income incuding everything also makes it a not-so-useful metric for peer-to-peer comparison. Everything also includes one-time s
82 Styles9002 : Allegiant lost money in Q3? I must have missed that press release...
83 United787 : No matter which way you cut it, AA is in serious trouble. AA may not be my preferred airline, but I would hate to see them go. All of the other airli
84 WorldTraveler : There's not an industry analyst that would agree with you....but I suppose you are entitled to your opinion. To say that AMR is the only airline that
85 Tommytoyz : Are you saying the old DL is still operating? It is not, if you think it is, I give up. The current Delta was incorporated on April 25, 2007. The old
86 CokePopper : What? I guess I missed that 20 years ago in my in-doctrine training class. lets see....Delta Air Service ................Delta Air Lines Don't ever r
87 United1 : I've never heard that before as far as I know it has always been "Delta Air Lines Inc." Do you happen to have a source for that?
88 NWAESC : Anytime I've ever heard that used here at NW, it's been in the context of a snide remark.
89 Post contains links Tommytoyz : DL's own website: AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF DELTA AIR LINES, INC. The name of the Corporation is Delta Air Lines, Inc. (th
90 United1 : Oh how cool what an interesting little factoid....thanks for finding that.
91 Bobnwa : To be honest the term legacy carrier has not been around that long. It came into vogue to separate one group of carriers from another group, the LCC
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