Delta Air Lines, which is seeking to preserve cash and avoid a bankruptcy filing, said its second-quarter net loss narrowed to $382 million...
Delta Air Lines, which is seeking to preserve cash and avoid a bankruptcy filing, said its second-quarter net loss narrowed to $382 million. It is the only U.S. carrier so far to report a loss for the quarter.
Delta lost $2.64 a share, compared with a net loss of $1.96 billion, or $15.79 a share, for the quarter last year, the airline announced. Sales at Delta, the third-largest U.S. airline, rose 5.7 percent to $4.19 billion. Revenue for every seat flown 1 mile was still the lowest among the six U.S. airlines that have reported.
“It’s lagging far behind the industry average,” said Fitch Ratings analyst Bill Warlick. “That’s a very discouraging number.”
Delta on June 30 reiterated that it may have to seek bankruptcy protection if it can’t reduce costs enough to stem losses or if cash drops to an “unacceptably low level.” The carrier last year avoided a filing by winning pay and benefit concessions from pilots, yielding $1 billion in annual savings.
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Delta shares fell 36 cents, or 9.2 percent, to $3.55 yesterday.
Tax expenses take
bite out of profit
McDonald’s second-quarter profit fell 10 percent on tax repatriation costs and its sales growth eased to its lowest level since the world’s largest restaurant company began a resurgence in 2003.
Despite losing some momentum, McDonald’s reported a modest gain in operating income yesterday and posted another solid showing at U.S. restaurants that have been key to its recovery.
Net income was $530.4 million, or 42 cents per share, compared with $590.7 million, or 47 cents per share, in the second quarter of 2004.
Results included an incremental tax expense of 9 cents per share related to the repatriation of overseas profits under a new federal law. Excluding that, operating income grew 5 percent to $1.02 billion, or 51 cents a share — 3 cents better than the average estimate of analysts surveyed by Thomson Financial before McDonald’s forecast its results last week.
Shares in the company, one of the 30 Dow Jones industrial stocks, fell 12 cents to close at $30.78.
rises 8.8 percent
Coca-Cola said second-quarter profit climbed 8.8 percent, topping analysts’ estimates, on demand for Powerade sports drinks in Latin America and Europe, and a sales recovery in the U.S.
Net income rose to $1.72 billion, or 72 cents a share, from $1.58 billion, or 65 cents, a year earlier. Sales jumped 6.7 percent to $6.31 billion, the biggest gain in more than a year.
Coca-Cola, which posted a profit decline in two of the past four quarters, was expected to earn 64 cents a share, the average of 16 analysts surveyed by Thomson First Call. Profit gained 4 cents a share because of a lawsuit settlement and a tax benefit.
Chief Executive E. Neville Isdell’s turnaround effort is gaining momentum, helped by more marketing and a 7 percent boost in overseas sales. Demand for Dasani bottled waters soared 34 percent and Powerade sports drinks 23 percent.
Shares of Coca-Cola, one of the Dow industrials, gained 62 cents to $43.95 yesterday.
Profit down 61%
compared with ’04
Nextel Communications, the wireless carrier being bought by Sprint, said second-quarter profit fell 61 percent from a year ago when it had a tax gain. Sales rose as more users were added than analysts expected.
Net income declined to $524 million, or 46 cents a share, from $1.34 billion, or $1.16, a year earlier, Reston, Va.-based Nextel said yesterday. Profit excluding some items topped the average analyst estimate in a Thomson Financial survey. Sales advanced 16 percent to $3.82 billion, also beating estimates.
Chief Executive Timothy Donahue, 56, yesterday issued what will probably be the last earnings report for Nextel as a stand-alone company. Final approval from U.S. regulators may come in the next couple of weeks, Donahue said on the conference call.
Shares of Nextel, the fifth-largest U.S. mobile-phone services provider, fell 53 cents to $32.50 yesterday.
Compiled from The Associated Press and Bloomberg News