Delta Shares Up As Profit Beats, To Cut Capacity To Combat Dollar Strength

Delta Air Lines Inc. shares rose almost 2% in premarket trade Wedneday, after the carrier beat first-quarter profit estimates. Delta said it had net income of $746 million, or 90 cents a share, in the quarter, up from $213 million, or 25 cents a share, in the year-earlier period. Adjusted per-share earnings came to 45 cents, ahead of the FactSet consensus of 44 cents. Revenue rose to $9.39 billion from $8.92 billion, matching the FactSet consensus. "While the strong dollar is creating headwinds with international revenues, it also contributes to the lower fuel prices which will offset those headwinds with over $2 billion in fuel savings this year," Chief Executive Richard Anderson said in a statement. "We are looking at June quarter operating margins of 16-18 percent with over $1.5 billion of free cash flow--these record results and cash flows show that the strong dollar is a net positive for Delta." To combat the effect of the strong dollar, the company is planning to reduce international capacity by 3% for the winter schedule, he said. Shares have fallen 12.4% in the year so far, while the S&P 500 has gained 1.8%.