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Delta today provided adjusted guidance for third-quarter financials following the August outage that resulted in significant operational disruptions. Chief Financial Officer Paul Jacobson, presenting at the Cowen Global Transportation Conference, said Delta is on track to produce a solid 18-19 percent operating profit margin (compared to a prior outlook of 19-21 percent) and nearly $1.5 billion of operating cash flow, despite headwinds from operational disruption, volatile fuel prices and continued unit revenue weakness.

Jacobson also told investors that the outage and subsequent operational recovery are expected to reduce September quarter pretax income by $150 million. That figure includes the $100 million in negative revenue impact from the outage reported on Sept. 2, and $50 million in net costs of the outage. He reiterated to investors Delta’s focus on being the first network carrier to return to positive unit revenue growth – an important indicator that margins and cash flows are sustainable regardless of the direction of fuel prices.

Forward Looking Projections. This story includes projections for non-GAAP financial measures, which we cannot reconcile to accounting principles generally accepted in the U.S. (“GAAP”)  because mark-to-market adjustments and settlements required for these reconciliations will not be known until the end of the period and could be significant.

Statements in this story that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements.  These risks and uncertainties include, but are not limited to, the effects of terrorist attacks or geopolitical conflict; the cost of aircraft fuel; the impact of rebalancing our hedge portfolio, recording mark-to-market adjustments or posting collateral in connection with our fuel hedge contracts; the availability of aircraft fuel; the possible effects of accidents involving our aircraft; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; interruptions or disruptions in service at one of our hub or gateway airports; disruptions or security breaches of our information technology infrastructure; our dependence on technology in our operations; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third party regional carriers; failure or inability of insurance to cover a significant liability at Monroe’s Trainer refinery; the impact of environmental regulation on the Trainer refinery, including costs related to renewable fuel standard regulations; our ability to retain management and key employees; competitive conditions in the airline industry; the effects of extensive government regulation on our business; the sensitivity of the airline industry to prolonged periods of stagnant or weak economic conditions; uncertainty in economic conditions and regulatory environment in the United Kingdom related to the exit of the United Kingdom from the European Union; and the effects of the rapid spread of contagious illnesses.  

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015, and our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016.  Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of Sept. 7, 2016, and which we have no current intention to update.

 

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