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Category: Stock Market and Delta Airlines
Date: 14 January 2020 Stock Price: $59.49 We take a look at the 4th quarter earnings report of their 20219 fiscal year of Delta Airlines, a U.S global airline company that has over 5000 departing flights on a daily basis across the world.
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About Delta Airlines
Delta Air Lines (NYSE: DAL) is the U.S. global airline leader in products, services, innovation, reliability and customer experience. Powered by its 80,000 people around the world, Delta continues to invest in its people, improving the air travel experience and generating industry-leading shareholder returns.
Headquartered in Atlanta, Delta offers more than 5,000 daily departures and as many as 15,000 affiliated departures including the premier SkyTeam alliance, of which Delta is a founding member. Delta serves nearly 200 million people every year, taking customers across its industry-leading global network to more than 300 destinations in over 50 countries.
Headquartered in Atlanta, Delta offers more than 5,000 daily departures and as many as 15,000 affiliated departures including the premier SkyTeam alliance, of which Delta is a founding member. Delta serves nearly 200 million people every year, taking customers across its industry-leading global network to more than 300 destinations in over 50 countries.
Overview of Delta Airlines' 4th quarter 2019 earnings report
Data below is reported for the latest quarter unless stated otherwise
- Revenue: $11.4389 billion (up from $10.742 billion for the same quarter of the previous year)
- Revenue increased by 6% over the last 12 months
- Operating expenses: $10.040 billion (up from $9.652 billion for the same quarter of the previous year)
- Operating expenses increased by 4% over the last 12 months
- Net earnings: $1.099 billion (up from $1.019 billion for the same quarter of the previous year)
- Diluted earnings per share: $1.71 (up from $1.49 for the same quarter of the previous year)
- Dividend declared: $0.4025
- Dividend yield: 2.96%
- Diluted weighted-average shares outstanding: 644 million (down from 683 million for the same quarter of the previous year)
- Cash and cash equivalents: $2.882 billion
- Cash and cash equivalents per share: $4.47
- Cash and cash equivalents makes up 7.5% of Delta Airlines' market capital
- Cash and cash equivalents makes up 4.46% of Delta Airlines' total assets
- Accounts receivable: $2.854 billion
- Accounts receivable makes up 4.42% of Delta Airlines' total assets
- Goodwill: $9.781 billion
- Goodwill makes up 15.15% of Delta Airlines' total assets
- Goodwill per Delta Airlines stock: $15.18
- Stockholders equity of Delta Airlines' : $15.440 billion
- Stockholders equity per share: $23.97
- So Delta Airlines is trading at 2.48 times its stockholders equity per share. This is within the expected range of between 2 and 4 most firms tend to trade at
- Long term debt of Delta Airlines: $8.873 billion
- Long term debt makes up 30.7% of Delta Airlines total liabilities
- Cash generated from operations by Delta Airlines for the 4th quarter: $969 billion
- Cash generated from operations per share for the 4th quarter: $1.50
Delta Airlines's management commentary on the results and fiscal guidance
ATLANTA, Jan. 14, 2020 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the December quarter and full year 2019 and provided its outlook for the March quarter 2020. Highlights of the December quarter and full year 2019 results, including both GAAP and adjusted metrics, are on page four and are incorporated here.
"2019 was a truly outstanding year on all fronts – the best in Delta's history operationally, financially and for our customers. Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success. I'm pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019," said Ed Bastian, Delta's chief executive officer. "As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75."
"2019 was a truly outstanding year on all fronts – the best in Delta's history operationally, financially and for our customers. Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success. I'm pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019," said Ed Bastian, Delta's chief executive officer. "As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75."
"Our industry-leading operational performance and the unmatched service our people provide are the reasons why more customers than ever are choosing to fly Delta. Investments in reliability, product and service, airports and technology are reshaping customer perception and driving record satisfaction scores and increasing brand preference." said Glen Hauenstein, Delta's president. "We delivered $47 billion in revenue in 2019, a more than $3 billion increase when adjusted over prior year, while sustaining a revenue premium to the industry of more than 110%. Demand trends remain healthy and we expect momentum to continue in 2020, with revenue growth of 5% to 7% in the March quarter."
Cash Flow and Shareholder Returns
For the full year, Delta generated $8.4 billion of operating cash flow and $4.2 billion of free cash flow. Full year cash flow is net of $1 billion of voluntary pension contributions, including $500 million made in the December quarter. The company invested $4.5 billion into the business in 2019 including $954 million in the December quarter. This supported the delivery of 88 new aircraft during the year. The company's ongoing fleet transformation is driving higher customer satisfaction, premium seat growth and improved fuel efficiency.
For the December quarter, Delta generated $969 million of operating cash flow and $141 million of free cash flow. Delta returned $484 million to shareholders, comprised of $225 million of share repurchases and $259 million in dividends during the quarter. For the full year, Delta returned $3 billion to shareholders, including $2 billion of share repurchases and $980 million in dividends. "Strong cash generation continues to set Delta apart and enables consistent reinvestment in the business while maintaining cash returns to owners at 70% of free cash flow," added Jacobson. "We expect to generate free cash flow of $4 billion again this year, putting us on track to deliver a three-year cumulative free cash flow of over $10 billion by the end of 2020."
Cash Flow and Shareholder Returns
For the full year, Delta generated $8.4 billion of operating cash flow and $4.2 billion of free cash flow. Full year cash flow is net of $1 billion of voluntary pension contributions, including $500 million made in the December quarter. The company invested $4.5 billion into the business in 2019 including $954 million in the December quarter. This supported the delivery of 88 new aircraft during the year. The company's ongoing fleet transformation is driving higher customer satisfaction, premium seat growth and improved fuel efficiency.
For the December quarter, Delta generated $969 million of operating cash flow and $141 million of free cash flow. Delta returned $484 million to shareholders, comprised of $225 million of share repurchases and $259 million in dividends during the quarter. For the full year, Delta returned $3 billion to shareholders, including $2 billion of share repurchases and $980 million in dividends. "Strong cash generation continues to set Delta apart and enables consistent reinvestment in the business while maintaining cash returns to owners at 70% of free cash flow," added Jacobson. "We expect to generate free cash flow of $4 billion again this year, putting us on track to deliver a three-year cumulative free cash flow of over $10 billion by the end of 2020."
Delta Airlines (NYSE: DAL) stock price history
The image below, obtained from Google, shows the stock price history of Delta Airlines (NYSE: DAL) over the last 5 years. And it's been a pretty good time for Delta Airlines' stockholders. 5 years ago it was trading at around $45.90 and its currently trading at around $59.49 a stock. That's a return of 29.6% provided to Delta Airlines stockholders over the last 5 years.
The stock of Delta Airlines is trading at closer to its 52 week high of $63.44 than it is to its 52 week low of $46.40 which to us is a clear indication that the short term sentiment and momentum of Delta Airlines' stock is positive at this point in time.
The stock of Delta Airlines is trading at closer to its 52 week high of $63.44 than it is to its 52 week low of $46.40 which to us is a clear indication that the short term sentiment and momentum of Delta Airlines' stock is positive at this point in time.
Recent coverage of Delta Airlines
The extract below discusses the latest results from Delta Airlines as obtained from Thestreet,com
Delta Air Lines Inc. (DAL) - Get Report posted much stronger-than-expected fourth quarter earnings Tuesday and said it was continuing to take customers from rivals thanks to the grounding of Boeing's 737 MAX aircraft. Delta said earnings for the three months ending in December came in at $1.70 per share, up 30.7% from the same period last year and well ahead of the Street consensus forecast of $1.40 per share. Group revenues, Delta said, rose 7% to $11.44 billion, again topping analysts' forecasts of an $11.34 billion tally.
Looking into the 2020 financial year, Delta said it sees earnings in the region of $6.75 to $7.75 per share, compared to the Refinitiv forecast of $7.21 per share. Delta also added it was picking up new customers from rivals thanks in part to the ongoing grounding of Boeing's (BA) - Get Report 737 MAX jet.
"2019 was a truly outstanding year on all fronts – the best in Delta's history operationally, financially and for our customers," said CEO Ed Bastian. "Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success. I'm pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019."
Read the full article here
Delta Air Lines Inc. (DAL) - Get Report posted much stronger-than-expected fourth quarter earnings Tuesday and said it was continuing to take customers from rivals thanks to the grounding of Boeing's 737 MAX aircraft. Delta said earnings for the three months ending in December came in at $1.70 per share, up 30.7% from the same period last year and well ahead of the Street consensus forecast of $1.40 per share. Group revenues, Delta said, rose 7% to $11.44 billion, again topping analysts' forecasts of an $11.34 billion tally.
Looking into the 2020 financial year, Delta said it sees earnings in the region of $6.75 to $7.75 per share, compared to the Refinitiv forecast of $7.21 per share. Delta also added it was picking up new customers from rivals thanks in part to the ongoing grounding of Boeing's (BA) - Get Report 737 MAX jet.
"2019 was a truly outstanding year on all fronts – the best in Delta's history operationally, financially and for our customers," said CEO Ed Bastian. "Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success. I'm pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019."
Read the full article here
Delta Airlines (NYSE: DAL) latest stock valuation
So what is Delta Airlines' stock worth based on the release of their latest earnings report provided by Delta Airlines? Based on the latest earnings results, and their fiscal guidance our valuation models provide a target (full value) price for Delta Airlines at $82.90 a Delta Airlines stock (up strongly from our 3rd quarter 2019 earnings report valuation of Delta Airlines). We therefore believe that the stock is undervalued at its current price of $59.49
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $82.90. Therefore we see a good entry point into Delta Airlines stock at $74.60 or below. Since Delta Airlines is trading at well below our suggested entry point into the stock we rate Delta Airlines as a buy.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $82.90. Therefore we see a good entry point into Delta Airlines stock at $74.60 or below. Since Delta Airlines is trading at well below our suggested entry point into the stock we rate Delta Airlines as a buy.
Next earnings release of Delta Airlines
It is expected that Delta Airlines will release their 1st quarter 2020 earnings report in middle April 2020