Delta Q1 profit beats estimates; cost, tax cuts to lift Q2

Delta reported Thursday Q1 profit that beat Wall Street estimates on higher average fares and passenger traffic and it expected cost curbs and tax cuts to help growth in its next three months. The carrier reported earnings per share of 77c, down from earnings of 82c per share in the year ago period due to winter storms and fuel prices, but topping analysts’ average estimate of 73 cents per share. In Q2, Delta expects earnings per share of $1.80 to $2, with improving costs and lower US corporate tax rate helping to mitigate higher fuel prices - a big worry for airlines as crude prices hover around three-year highs. “We are seeing Delta’s best revenue momentum since 2014, with positive domestic unit revenues, improvements in all our international entities, strong demand for corporate travel and double-digit increases in our loyalty revenues,” Delta President Glen Hauenstein said. “We expect to maintain this momentum and deliver total revenue growth of 4 to 6% for the full year.” The carrier said total unit revenue would increase 3 to 5% in Q2. It also forecast an increase in quarterly unit costs, excluding fuel and profit sharing, of 1 to 3% compared with the preceding year.<br/>