Delta Outage Dings Revenue, Profit

Delta Air Lines Inc. said a power outage that plagued service world-wide for several days in August dented its revenue and profit, though lower fuel costs helped soften the blow.

The nation's No. 2 carrier also said Thursday that it would continue to face headwinds in the fourth quarter, as margins could take a hit from unit revenue even with fuel-cost savings.

Shares edged 0.9% lower to $38.90 in premarket trading.

The Atlanta-based airline canceled thousands of flights in August because of an equipment malfunction at its Atlanta headquarters. This dented unit revenue by 2 points in the September quarter, Delta said.

Unit revenue, a closely watched metric of how much an airline takes in for each passenger flown a mile, fell 6.8% in the September quarter. Delta had anticipated a 7% decline. For the fourth quarter, the company said it expects passenger unit revenue to be down 3% to 5%.

Overall for the period, Delta reported a profit of $1.26 billion, down from $1.32 billion a year ago. On a per-share basis, profit was $1.69 a share, up from $1.65, aided by a lower outstanding share count. Excluding certain items, earnings were $1.70 a share, above analysts' estimates for $1.65 a share.

Revenue slipped 6% to $10.48 billion. Analysts anticipated $10.55 billion.

Market fuel prices fell 10% during the period, the company said, bringing fuel expenses lower.

Delta Chief Financial Officer Paul Jacobson recently said that Delta would be the first of the three network carriers to report a positive year-over-year increase in unit revenue, and pointed to an improving domestic fares environment that is been replicated in its Pacific and Latin American markets.

The company also said it would further pare down its capacity growth for the remainder of the year and into 2017. Delta Chief Executive Ed Bastian said the company "will be taking a cautious approach to 2017 by keeping our capacity in line with the December quarter's 1% growth level." Analysts were looking for overall capacity growth for 2017 to be pegged around 2%.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

October 13, 2016 08:35 ET (12:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.