Delta boosts outlook, cites tax reform benefits, shares jump

(Reuters) - Delta Air Lines Inc (NYSE:DAL) reported better-than-expected profit for the fourth quarter on Thursday, helped by a busy holiday travel season, and forecast even better performance in the current quarter, sending its shares up almost 3 percent in premarket trading. The carrier said it expects to see additional benefits from tax reform.

The No. 2 U.S. carrier forecast total unit revenue, a measurement closely watched by investors, to increase by 2.5 percent to 4.5 percent in the first quarter of 2018.

"We enter 2018 with significant momentum and every entity delivering positive passenger unit revenue for the first time in five years, driven by a robust demand environment and improving business fares," said Delta's President Glen Hauenstein.

Based on that, Atlanta-based Delta raised its full-year profit outlook to between $6.35 and $6.70 per share, well ahead of Wall Street estimates.

The bullish outlook from the airline, the first major U.S. carrier to report fourth-quarter earnings, comes a day after United Airlines (NYSE:UAL) and American Airlines (NASDAQ:AAL) also raised their forecasts for unit revenue.

Delta's net income for the fourth quarter dipped to $572 million, or 80 cents per share, in the quarter ended Dec. 31, from $622 million, or 84 cents per share, a year earlier.

That included a one-time charge of $150 million due to changes in the U.S. tax code enacted in December. Delta said the new tax law would cut its tax rate to between 22 percent and 24 percent in 2018.

Excluding that and other one-time items, Delta earned 96 cents per share, above the average 88 cents per share expected by analysts, according to Thomson Reuters I/B/E/S.

Total operating revenue rose 8.3 percent to $10.25 billion from $9.46 billion. Analysts on average had expected revenue of $10.13 billion.

Delta took a combined hit of $60 million from December's power outage at Atlanta's Hartsfield-Jackson Airport and Winter Storm Benji.

(Reporting by Alana Wise in New York and Ankit Ajmera in Bengaluru; Editing by Bill Rigby and Arun Koyyur)