The Stock of Delta Soared After Its Profit Surpassed Expectations and It Saw More "Robust Demand"

Delta Air Lines Inc. witnessed a surge in its shares on Thursday, bolstered by a strong third-quarter performance that exceeded expectations. The air carrier reported robust demand for travel that has continued into the current quarter. While overall adjusted revenue aligned with expectations, the month of September saw record revenue, prompting Delta to revise its full-year growth outlook.

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Delta's stock, represented by the ticker DAL, demonstrated a premarket increase of 2.2%, marking a third consecutive gain. This upturn comes on the heels of the stock reaching a five-month low of $35.24 on October 3.

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The company's net income rose to $1.11 billion, equivalent to $1.72 per share, compared to $695 million or $1.08 per share in the year-ago period. Adjusted earnings per share, which exclude one-time items, also saw an improvement, reaching $2.03 from $1.51, surpassing the FactSet consensus of $1.95.

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Delta's revenue experienced a notable growth of 10.8%, reaching $15.49 billion, while adjusted revenue saw an even more impressive increase of 13%, reaching $14.55 billion, which matched expectations.

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The airline's domestic passenger revenue increased by 6%, reaching $8.66 billion, while international revenue showed significant growth at 35%, including a 34% increase in transatlantic revenue.

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Delta also improved its load factor, increasing it to 88% from 87%, surpassing expectations set at 86.4%. This improvement was driven by a 17% increase in traffic, translating to 64.1 billion revenue passenger miles, coupled with a 16% rise in capacity, reaching 73.2 billion available seat miles.

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Looking forward to 2023, Delta has adjusted its earnings per share (EPS) guidance range to $6.00 to $6.25 from the previous $6 to $7. However, the company raised its sales growth outlook to approximately 20% from the previous range of 17% to 20%.

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Over the past three months leading up to Wednesday, Delta's stock had experienced a 25.0% decline. In the same period, the U.S. Global Jets ETF, represented by the ticker JETS, saw a 24.5% decrease, while the S&P 500 index, marked as SPX, slipped by 2.1%.

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Delta's recent performance reflects a resurgence in the airline industry, with travel demand showing resilience and an upward trajectory. This, in turn, has positively impacted the company's financial results and outlook for the near future. As Delta continues to navigate the ever-evolving travel landscape, investors remain optimistic about its potential for growth and recovery.

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