Delta Air reports $1 billion loss after charges
A Delta Airlines plane is seen at O'Hare International airport in Chicago, Illinois November 15, 2006.
Credit: Reuters/Frank Polich
NEW YORK (Reuters) - Delta Air Lines Inc on Wednesday reported a $1 billion quarterly loss, but was profitable before special charges, and its shares rose nearly 14 percent.
The company, which has agreed to buy Northwest Airlines Corp, said its second-quarter net loss came to $2.64 per share. The charges were mainly for the impairment of goodwill, according to Delta, which emerged from bankruptcy in April 2007.
Excluding the charges, Delta said it earned $137 million, or 35 cents per share.
The company, which like other airlines is contending with soaring energy prices, hedged 49 percent of its fuel consumption and realized $313 million in gains in the quarter.
Revenue rose roughly 10 percent to $5.5 billion, exceeding analysts' expectations of $5.41 billion.
Delta expects to end the year with liquidity of $3.2 billion, including $1 billion under a revolving credit facility.
The airline said it expected its capacity for the second half of 2008 to be down 4 percent from a year earlier, with a 13 percent decline domestically offsetting a 14 percent rise internationally.
The company plans to remove the equivalent of 100 regional aircraft by the end of the year.
U.S. airlines have announced big cutbacks as they grapple with unprecedented oil prices, which have doubled in the past year.
The carriers have been forced to raise fares, introduce fees, cut services, jobs and capacity and target more lucrative international routes.
In March, Delta unveiled plans to cut 2,000 jobs, offering voluntary retirement and "early out" programs, but in June said more than 4,000 employees had chosen to take part in the programs.
Delta took a $96 million severance charge in the quarter for the work force reduction programs.
The company said its merger with Northwest Airlines is targeted to close during the fourth quarter.
Delta shares were up 65 cents, or 13.9 percent, at $5.32 in morning New York Stock Exchange trade. They have fallen from a 52-week high of $21.80 set on July 19, 2007.
(Reporting by Mark McSherry; Editing by Gerald E. McCormick, Dave Zimmerman and Lisa Von Ahn)
