Shares of Delta Air Lines Inc. (DAL, Financial) were up 2.11% to $58.15 in premarket trading on Wednesday after topping consensus estimates by 7 cents with non-GAAP earnings of 96 cents per share for the first quarter of 2019. The result represented 28% growth from the same quarter a year ago.
Non-GAAP earnings also grew 38% to $1.09 per share in the trimester. Revenue was nearly $10.5 billion or 7.5% higher, beating expectations by $80 million.
Revenue growth was driven by improvements across the business of Delta Air Lines including an 8% jump in ticket-business cabin and premium products, a 12% increase in loyalty travel awards and a 16% growth in travel-related services. Cargo revenue decreased 5% during the quarter as a result of lower volumes.
In addition, the company noted a 2.4% increase in adjusted total revenue per available seat mile and a 0.2% decline in the adjusted non-fuel cost per available seat mile.
Amid the most important projections for the second quarter of 2019, Delta Air Lines expects revenue growth of 6-8% and earnings per share of $2.05 to $2.35 versus consensus estimates of $2.14 per share.
Delta Air Lines shares traded at $56.95 at close Tuesday for a market capitalization of $38.67 billion. The share price increased 11% for the past year through April 9 to above the 200-, 100- and 50-day simple moving average lines. The closing price on Tuesday was 26.3% above the 52-week low of $45.08 and 7.7% below the 52-week high of $61.32.
The 14-day Relative Strength Indicator of 73.39 indicates the stock is close to overbought levels.
The Peter Lynch chart suggests the stock is still not expensive.
Wall Street issued an overweight recommendation rating on shares of Delta Air Lines, meaning analysts foresee the stock outperforming either the industry or the overall market within 52 weeks with an average target price of $64.15 per share.
Disclosure: I have no positions in any securities mentioned.
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