Delta Air Lines Inc. reported a much wider third-quarter loss despite a rise in revenue and warned that its financial situation has worsened to the point where it needs to significantly reduce its costs quickly to turn things around.
The results, announced Wednesday, missed Wall Street's reduced expectations.
The nation's third-largest airline said it lost $651 million, or $5.16 a share, for the three months ending Sept. 30, compared to a loss of $168 million, or $1.36 a share, in the same period a year ago. The current loss includes $5 million Delta paid out in dividends to preferred stockholders.
Excluding one-time items, Delta said it lost $592 million, or $4.73 a share, in the July-September period. On that basis, analysts surveyed by Thomson First Call were expecting a loss of $4.38 a share, an estimate that had been reduced after Delta warned of its loss on Friday.
Revenue in the this quarter was $3.87 billion, a 5.9 percent increase from the $3.66 billion Delta recorded a year ago.
"Last month we outlined the key elements of Delta's transformation plan which targets $1 billion in annual pilot cost savings, as well as participation from Delta's other stakeholders," said Gerald Grinstein, Delta's chief executive officer. "As Delta's financial situation continues to deteriorate, time is of the essence."
Analysts believe the airline has only a few weeks left to win $1 billion in concessions from pilots and restructure its heavy debt to avoid a Chapter 11 filing.
Delta blames high fuel and pilot costs as major contributors to its continued losses, which have surpassed $6 billion in the last three years.
For the first nine months of the this year, Delta said its net loss was $3.01 billion, or $24.06 a share, compared to a loss of $458 million, or $3.71 a share, in the year-ago period. The current nine-month loss includes $14 million Delta paid out in dividends to preferred stockholders. Nine-month revenue was $11.36 billion, an 8.4 percent increase from the $10.48 billion recorded in 2003.