Delta Air Lines (DAL) has reported 36.53 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $622 million, or $0.84 a share in the quarter, compared with $980 million, or $1.25 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $604 million, or $0.82 a share compared with $926 million or $1.18 a share, a year ago. Revenue during the quarter went down marginally by 0.46 percent to $9,458 million from $9,502 million in the previous year period. Gross margin for the quarter contracted 81 basis points over the previous year period to 57.67 percent. Total expenses were 89.22 percent of quarterly revenues, up from 81.93 percent for the same period last year. That has resulted in a contraction of 729 basis points in operating margin to 10.78 percent.
Operating income for the quarter was $1,020 million, compared with $1,717 million in the previous year period.
"Delta had a year of record-breaking performance in 2016 - financially, operationally and for our customers - and its an honor to recognize our employees efforts this year with over $1 billion in profit sharing," said Ed Bastian, Deltas chief executive officer. "As we move into 2017, we are seeing our unit revenues turn positive which should return the company to margin expansion by the back half of the year. This will allow us to produce the solid returns and cash flows that investors rely upon from Delta."
The company forecasts operating income to grow in the range of 11 percent to 13 percent for the first-quarter.
Working capital remains negative
Working capital of Delta Air Lines was negative $7,788 million on Dec. 31, 2016 compared with negative $8,470 million on Dec. 31, 2015. Current ratio was at 0.49 as on Dec. 31, 2016, down from 0.52 on Dec. 31, 2015.
Debt comes down
Delta Air Lines has recorded a decline in total debt over the last one year. It stood at $7,332 million as on Dec. 31, 2016, down 11.97 percent or $997 million from $8,329 million on Dec. 31, 2015. Total debt was 14.30 percent of total assets as on Dec. 31, 2016, compared with 15.68 percent on Dec. 31, 2015. Debt to equity ratio was at 0.60 as on Dec. 31, 2016, down from 0.77 as on Dec. 31, 2015.
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