http://www.morningstar.com/earnings/18411614-delta-air-lines-inc-dal-q3-2010.aspx

Delta Air Lines Inc DAL
Q3 2010 Earnings Call Transcript

Transcript Call Date 10/20/2010

Operator: Welcome to the Delta Air Lines September Quarter Earnings Conference Call. My name is Cynthia, and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct the question-and-answer session following the presentation. (Operator Instructions) As a reminder today's call is being recorded.

I would now like to turn the conference over to (Jill Sullivan Greer), Director of Investor Relations for Delta.

Jill Greer - Director, IR: Thanks, Cynthia. Good morning everyone and thanks for joining us to discuss Delta's September quarter financial results. Joining us from Atlanta today are Richard Anderson, our CEO; Ed Bastian, our President; and Hank Halter, our Chief Financial Officer. Also in the room for the Q&A are Steve Gorman, our Chief Operating Officer; Mike Campbell, our EVP of HR and Labor Relations; Ben Hirst, our General Counsel; and Ned Walker, our Chief Communications Officer.

Richard will begin the call with the Delta and industry overview. Ed will address our September quarter financial and revenue performance and Hank will conclude with our cost performance and liquidity.

We've allocated about 25 minutes for management comments and after their comments we've allocated 25 minutes for questions from the analysts. We'll then conclude the call with a 10-minute Q&A for the media. When we get to the Q&A, I'd like to request that you limit yourself to two questions; that should allow us to get to as many questions as possible during today's call.

Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in Delta's SEC filings. We’ll also discuss certain non-GAAP financial measures. All results exclude special items unless otherwise noted and you can find a reconciliation of non-GAAP measures on our Investor Relations website at delta.com.

So with that, I'll turn the call over to Our Chief Executive Officer, Richard Anderson.

Richard H. Anderson - CEO: Thanks, Jill. Good morning, everyone. Thank you for joining us. I'll make these remarks very brief so we can get to your questions. This morning we announced $920 million profit, operating margin of 13.5% and earnings of $1.10 per diluted share beating first call consensus by $0.16. The results were driven by revenue performance, cost discipline and harvesting the synergies from the merger.

Passenger unit revenues were up a little over 16% year-on-year, top line revenue grew 18%, and consolidated X fuel unit cost remained flat on capacity growth, up 2% in the quarter. These results show the benefits of the merger for our shareholders. We are guiding to a profitable December quarter. These results are the culmination of all the work by the Delta team over the past five years and illustrate the benefits of the merger. We appreciate the hard and professional work of the Delta team. We want to thank all Delta employees who have worked hard to bring us to where we are today.

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