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

Delta's pre-tax income for the December 2014 quarter was USD 1.0 billion, excluding special items1, an increase of USD 474 million over the December 2013 quarter on a similar basis. Delta's net income for the December 2014 quarter was USD 649 million, or USD 0.78 per diluted share, and its operating margin was 12.6 percent, excluding special items.

For the full year 2014, Delta's pre-tax income, excluding special items, was USD 4.5 billion, a USD 1.9 billion increase over 2013. Delta's net income for the year was USD 2.8 billion with an operating margin of 13.1 percent, excluding special items.

On a GAAP basis including special items, Delta's December quarter pre-tax loss was USD 1.1 billion, operating margin was -8.6 percent and net loss was USD 712 million, or USD 0.86 per share. On a GAAP basis including special items, Delta's 2014 pre-tax income was USD 1.1 billion, operating margin was 5.5 percent and net income was USD 659 million.

2014 results include USD 1.1 billion in profit sharing expense, including USD 262 million in the December quarter, recognizing Delta employees' contributions toward meeting the company's financial goals.

The company's strong cash generation allowed it to accelerate its capital deployment plans by reducing its adjusted net debt2 to USD 7.3 billion, contributing an incremental USD 250 million above required funding to its defined benefit pension plans, and returning USD 1.35 billion to shareholders through a combination of USD 251 million of dividends and USD 1.1 billion of share repurchases in 2014.

"Our 2014 performance - an industry-leading operation, superior customer service, and a 70 percent increase in profits - shows that Delta is focused on delivering growing value for its employees, customers and investors," said Richard Anderson, Delta's chief executive officer. "As we begin 2015, we have a significant opportunity from lower fuel prices, which will drive more than USD 2 billion in fuel savings over 2014. Through our capacity discipline, pricing our product to demand, and the fuel savings, we expect to drive double-digit earnings growth, along with increased free cash flow and a higher return on invested capital in the upcoming year."

Revenue Environment

Delta's operating revenue improved 6 percent, or USD 571 million, in the December 2014 quarter compared to the December 2013 quarter. Traffic increased 4.0 percent on a 3.7 percent increase in capacity.

Passenger revenue increased 4.6 percent, or USD 361 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 0.8 percent year over year with a 0.6 percent improvement in yield.

Cargo revenue increased 2.1 percent, or USD 5 million, driven by increases in both freight volumes and yields.

Other revenue increased 21.3 percent, or USD 205 million, driven by SkyMiles revenues, third-party refinery sales, and joint venture settlements.