MINNEAPOLIS – Delta Air Lines Inc. said Tuesday that its fourth-quarter profit was nearly wiped out by Superstorm Sandy and special charges.
The storm forced airlines to cancel more than 20,000 flights. The impact was bigger at Delta because Sandy also slowed its operations at its new oil refinery near Philadelphia.
Delta's goal in restarting the refinery was to maximize jet fuel production and reduce the airline's fuel bill. But Sandy slowed the refinery's restart, and the refinery lost $63 million for the quarter and added 7 cents per gallon to the price of Delta's jet fuel. Delta said it expects the refinery to be profitable in the current quarter.
Delta said Sandy cut $100 million from its fourth-quarter profit. It recorded another $231 million in special items. What was left was net income for the quarter of $7 million, or a penny per share. During the same period last year Delta earned $425 million, or 51 cents per share.
Without special items, earnings would have been $238 million, or 28 cents per share.
Revenue rose 2 percent to $8.6 billion. Both the adjusted profit and the revenue were slightly better than expected by analysts surveyed by FactSet.
Managers said on a conference call that they're focused on improving profit margins. Delta also said it expects lower fuel prices in the first quarter.
J.P. Morgan analyst Jamie Baker raised his first-quarter profit estimate, citing lower fuel prices and strong travel demand.
Shares of Delta, based in Atlanta, rose 47 cents, or 3.4 percent, to $14.07 in midday trading. The shares haven't closed above $14 since November of 2010.
Delta's 2012 profit rose 18 percent to $1 billion, or $1.19 per share. In 2011 it earned $854 million, or $1.01 per share. Full-year revenue rose 4 percent to $36.67 billion.
Delta said it would cut first-quarter flying capacity by 2 percent to 4 percent. Airlines have trying to keep a lid on growth to they can charge more for the seats that remain.