Delta Airlines (DAL) revealed in-line fourth-quarter earnings and sales on Tuesday and projected improved revenue in the current period as it continues to lower capacity and ramps up refinery production.

The Atlanta-based carrier posted net income of $7 million, or a penny a share, compared with a year-earlier profit of $425 million, or 50 cents.

Excluding one-time items, Delta said it earned $238 million, or 28 cents a share, matching average analyst estimates in a Thomson Reuters poll.

Revenue for the three months ended in December climbed 2% to $8.6 billion from $8.4 billion a year ago, in-line with the Street’s view. The performance was driven by an increase in passenger revenue and load factor amid a 1.3% decline in capacity.

The year-over-year slump in earnings was partially related to a $75 million revenue impact related to super storm Sandy.

The storm also impacted the startup of the airline’s newly-acquired Trainer Refinery, which Delta is hoping will eventually help offset the persistent rise of fuel costs. The refinery produced a $63 million net loss for the quarter, however Delta said at current market prices Trainer should turn a modest profit in the current period.

"Our investments in Delta's network, products and operations, combined with our capacity discipline, have produced unit revenue growth that has outpaced the industry for 21 consecutive months," said Ed Bastian, Delta's president.

Because of its “strong revenue momentum” heading into fiscal 2013, Bastian said Delta is projecting a 4% to 6% increase in March quarter unit revenues.

It is also forecasting another 2% to 4% decrease in system capacity, which is expected to help improve margins.

Shares of Delta are up nearly 45% from 12 months ago.

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