The carrier aims to close out its December quarter with 11-13% year-over-year earnings growth.
Delta aircraft in Atlanta (Photo: Markus Mainka | Shutterstock)
Delta’s Q3 2024 earnings report released on Thursday saw earnings per share take a 45-cent hit in the third quarter due to the CrowdStrike outages earlier this summer.
In the carrier’s September Quarter 2024 Financial Results report, Delta restated its August 8 disclosure of the outage’s financial impact for the September quarter. This disclosure stated that the incident caused around 7,000 flight cancellations over the course of five days, leading to $380 million in customer refunds, $170 million in expense reimbursements and crew-related costs, and $50 million in estimated fuel expenses.
Additionally, the Q3 report stated the CrowdStrike outage reduced operating margins by 2.3 points and earnings per share for the quarter by 45 cents.
“On an earnings per share basis, our results would have been at the high end of initial guidance, excluding the 45 cent impact from the CrowdStrike-caused outage,” said Delta CEO Ed Bastian in the carrier’s earnings call on Thursday. “Delta continues to lead the industry operationally and financially, while delivering on our 2024 plan. Year to date, our on time performance is best in the industry, and our completion factor leads the network carriers, even when including the impact of the outage.”
Delta delivered an operating revenue of $14.6 billion in Q3, including the $380 million impact from the CrowdStrike outage. Adjusted operating expenses were $13.2 billion. The airline’s Q3 adjusted net debt is $18.7 billion, a reduction of $2.9 billion from the end of 2023. It paid $263 million on debt and financial lease obligations in the September quarter.
The airline’s adjusted operating cash flow for the quarter is $1.3 billion and had gross capital expenditures of $1.3 billion, leaving $95 million in free cash flow.
“For the December quarter, we expect to return to year-over-year earnings growth and margin expansion with an outlook for December quarter earnings of $1.60 to $1.85 per share on an 11 percent to 13 percent operating margin,” said Dan Janki, Delta’s chief financial officer, in the report. “Our teams are consistently running a great operation, enabling us to drive efficiency and deliver non-fuel unit cost growth of low-single-digits for the year, consistent with our outlook at the start of the year.”
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