Delta Air Lines, Inc. (NYSE:DAL) Q1 2019 Earnings Conference Call - Final Transcript

Apr 10, 2019 • 10:00 am ET


Delta Air Lines, Inc. (NYSE:DAL) Q1 2019 Earnings Conference Call - Final Transcript


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Good morning, everyone, and welcome to the Delta Air Lines March Quarter Financial Results Conference Call. My name is Jake, and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded.

I would now like to turn the conference over to Jill Greer, Vice President of Investor Relations. Please go ahead.

Jill Greer

Thanks, Jake. Good morning, everyone, and welcome to our March quarter earnings call.

Joining us from Atlanta today are our CEO, Ed Bastian; our President, Glen Hauenstein; and our CFO, Paul Jacobson. Our entire leadership team is here in the room for the Q&A session. Ed will open the call and give an overview of Delta's financial performance, Glen will then address the revenue environment, and Paul will conclude with a review of our cost performance and cash flows. To get in as many questions as possible during the Q&A, please limit yourself to one question and a brief follow-up.

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 non-GAAP financial measures. All results exclude special items, unless otherwise noted. And you can find a reconciliation of our non-GAAP measures on the Investor Relations page at

And with that, here's Ed.

Ed Bastian

Thanks, Jill. Good morning, everyone. Thanks for joining us today.

Earlier today, Delta reported an $832 million pre-tax profit or $0.96 per share. The core business performed well and we saw a nice upside from our contract renewal with American Express. We grew our earnings per share by 28%, expanded our operating margin by 150 basis points and delivered an after-tax return on invested capital of 14.5% over the last 12 months. This performance demonstrates how we're translating our unique brand, unmatched competitive advantages, and pipeline of initiatives to drive earnings growth, margin expansion and solid returns for our owners. This also underscores our confidence that we have in our future, which is one of the reasons why we accelerated our share repurchases, returning $1.6 billion to our shareholders this quarter.

We achieved 7.5% top line growth as demand for our product remained strong. Our ancillary businesses delivered double-digit growth, and we extended our leadership in delivering great value for our customers. This starts with industry leading reliability as the world's best run airline. We delivered the best March quarter completion factor in our history at 99.06%, despite a very difficult winter weather. Reliability and our culture of service underpin the strength of our brand and allow us to build lasting customer relationships. Domestic net promoter score has averaged 50% this year, up 7 points versus last year. This is the reason we sustain the best revenue premium in the industry, and it's