Delta Air Lines Inc., the nation's No. 3 carrier, reported Wednesday it was hampered by high fuel prices in the fourth quarter but was able to post a narrower loss on a solid increase in sales.
For the three months ending Dec. 31, Atlanta-based Delta said it lost $70 million, or 18 cents a share, compared to a loss of $1.98 billion for the same period a year earlier. The airline did not provide a per share figure for the prior year, when it was in bankruptcy.
Excluding reorganization items, Delta said it lost $105 million in the fourth quarter. It did not provide a comparable per-share figure.
Analysts surveyed by Thomson Financial were expecting a Delta loss of 18 cents a share. Analyst estimates generally exclude one-time items.
Revenue in the fourth quarter rose 10 percent to $4.68 billion, compared to $4.25 billion recorded a year earlier.
A statement issued with the company's earnings release did not update investors on the status of talks between Delta and Northwest Airlines and United Airlines. Delta has said previously that its board is considering strategic options, including a possible consolidation transaction. The airline has not elaborated.
As of Dec. 31, Delta had $3.3 billion in cash, cash equivalents and short-term investments, of which $2.8 billion was unrestricted. Delta said it has an additional $1 billion available under a revolving credit facility, resulting in a total of $3.8 billion in unrestricted liquidity.
In the fourth quarter, Delta hedged 21 percent of its fuel consumption, resulting in an average fuel price of $2.61 per gallon. Delta said it realized roughly $40 million in cash gains on fuel hedge contracts settled during the quarter.
Even so, it said it spent $1.36 billion on aircraft fuel and related taxes in the quarter, compared with $1.06 billion a year earlier.
For all of 2007, Delta said it earned $1.61 billion, compared to a loss of $6.2 billion for all of 2006. It did not provide per-share figures. Full-year revenue rose to $19.15 billion, compared to $17.53 billion recorded a year earlier.
Delta said it expects operating margins of minus 2 percent to minus 4 percent in the first quarter of this year. For all of 2008, it expects operating margins of 4 percent to 6 percent. It expects to see its domestic capacity drop 2 percent to 3 percent in the first quarter, while its international capacity is expected to increase 10 percent to 12 percent in the first quarter compared to a year earlier.