OREANDA-NEWS.    Delta Air Lines (NYSE: DAL) today reported financial results for the June 2014 quarter.  Key points include:

Delta's pre-tax income for the June 2014 quarter was USD 1.4 billion, excluding special items1, an increase of USD 593 million over the June 2013 quarter on a similar basis.  Delta's net income for the June 2014 quarter was USD 889 million, or USD 1.04 per diluted share, and its operating margin was 15.1 percent, excluding special items.
On a GAAP basis which includes special items, Delta's pre-tax income was USD 1.3 billion, operating margin was 14.9 percent and net income was USD 801 million, or USD 0.94 per diluted share.
Results include USD 340 million in profit sharing expense in recognition of Delta employees' contributions toward achieving the company's financial goals.
Delta generated over USD 2 billion of operating cash flow and USD 1.5 billion of free cash flow during the June 2014 quarter.  As of mid-July, the company has used its strong cash generation in 2014 to reduce its adjusted net debt below USD 8 billion, contribute more than USD 900 million of funding to its defined benefit pension plans, and return USD 550 million to shareholders through dividends and share repurchases.
Delta Air Lines and the Delta Connection carriers offer service to nearly 370 destinations on six continents. For more information visit news.delta.com.
"Delta's performance this quarter, with 9 percent top line growth, more than 4 points of margin expansion and USD 1.5 billion of free cash flow, shows the financial strength and resilience of our company.  We expect our September quarter performance will be even stronger, as we expand our operating margins to 15-17% and further improve our profitability," said Delta chief executive officer Richard Anderson.  "All credit goes to Delta people worldwide who not only produced this record financial performance, but also continue to lead the industry in operational reliability and customer satisfaction."

Revenue Environment

Delta's operating revenue improved 9 percent, or USD 914 million, in the June 2014 quarter compared to the June 2013 quarter, driven by continued strength in corporate and domestic revenues. Traffic increased 5.0 percent on a 3.2 percent increase in capacity.

Passenger revenue increased 9 percent, or USD 772 million, compared to the prior year period.  Passenger unit revenue (PRASM) increased 5.7 percent year-over-year with a 3.8 percent improvement in yield.   Seat-related products and other merchandising initiatives increased revenues by USD 45 million versus the prior year period.
Cargo revenue decreased 1 percent, or USD 2 million, as lower freight yields were partially offset by higher volumes.   
Other revenue increased 15 percent, or USD 144 million, driven by higher joint venture and SkyMiles revenues.