On Friday, Shares of Delta Air Lines, Inc. (NYSE:DAL), declined -0.18% to $48.87.
Delta Air Lines, stated financial results for the September 2015 quarter, counting adjusted net income of $1.4 billion or $1.74 per diluted share, up 45% from the September quarter of 2014.
Revenue Environment
Delta’s operating revenue for the September quarter reduced 0.6%, or $71 million, counting $235 million in foreign currency pressures. Passenger unit revenues declined 4.9%, which comprises about 2.5 points of impact from foreign currency.
Delta continues to successfully implement its Branded Fares initiative, increasing paid first class load factor by 8 points to 56% and expanding its Basic Economy product to over 450 markets. In total, Branded Fares products produced more than $75 million in incremental revenue in the September quarter.
Cost Performance
Adjusted fuel expense declined over $1.1 billion contrast to the same period in 2014, as 50% lower market fuel prices and an $87 million improvement in profit at the refinery offset $250 million in settled hedge losses.
CASM-Ex raised 0.9% for the September quarter on a year-over-year basis, with foreign exchange and the benefits of Delta’s domestic refleeting and other cost initiatives offsetting the company’s investments in its employees, products and operations. The September quarter also comprised about 1 point of unit cost pressure from benefit accruals related to recently declared pay improvements for Delta employees.
Delta’s debt reduction initiative continued to improve the company’s interest expense, producing $33 million in interest savings for the quarter contrast to the same period in 2014.
Cash Flow, Shareholder Returns, and Adjusted Net Debt
Delta generated $2.4 billion of adjusted operating cash flow and $1.4 billion of free cash flow during the quarter. The company used this strong cash generation to reinvest $1.0 billion back into the business, counting $450 million for its 3.5% ownership position in China Eastern. The company returned $532 million to its owners through $107 million of dividends and $425 million of share repurchases, while also strengthening its balance sheet by reducing its adjusted net debt to $6.4 billion.
During the quarter, Delta refinanced its senior secured credit facility ahead of its planned maturity. The new borrowings comprise a $1.5 billion undrawn revolver, a $500 million term loan, and a $500 million EETC with a blended rate of 3.77%. The improved strength of Delta’s balance sheet allowed it to lower the overall rate on the borrowing and improvement its revolver capacity by $275 million. In addition, the company reduced the outstanding principal amount by $320 million as it continues toward its $4 billion debt target by 2017.
Delta Air Lines, Inc. provides planned air transportation for passengers and cargo worldwide. The company operates in two segments, Airline and Refinery. Its route network comprises various gateway airports in Amsterdam, Detroit, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, Seattle, and Tokyo-Narita.
On other hand, J. C. Penney Company, Inc. (NYSE:JCP) is up 33.99% over 12 months. The consensus price target is $10.03. The Company is now trading at $9.51, up 0.05%. The company has a market cap of $2.90B. The company has Gross Margin of 35.80%, while its operating margin is -0.80%, whereas its net profit margin was -4.50%.
85.20% of the shares owned by the institutions.
J. C. Penney Company, Inc., through its partner, J. C. Penney Corporation, Inc., sells merchandise through department stores in the United States. The company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings, in addition to provides various services, counting styling salon, optical, portrait photography, and custom decorating. As of March 18, 2015, it operated about 1,060 stores.
