A Delta aircraft touches down at Sangster International on June 9, on its inaugural flight to Montego Bay. The American carrier posted US$1.8 billion in profit over the period April to June 2007. - File

Delta AirLINES, the third-largest American carrier, cited a 5.5 per cent gain in sales as it reported Wednesday that it swung to a profit in the second quarter, which saw it emerge from bankruptcy after shaving billions of dollars in costs.

The Atlanta-based company's results beat Wall Street expectations when one-time items are excluded.

Its shares advanced 21 cents to US$21.40 in morning trading.

For the three months ending June 30, Delta said it recorded net income of US$1.77 billion (euro1.28 billion), or US$4.49 (euro3.26) a share, compared to a loss of US$2.21 billion (euro1.6 billion) in the same period a year earlier.

The corresponding per-share figure for the year-ago loss was not provided in Delta's balance sheet.

Excluding reorganisation and related one-time items, Delta said it had a profit of $274 million (euro198.85 million), or 70 cents a share, in the second quarter. On a comparable basis, analysts surveyed by Thomson Financial were expecting a profit of 59 cents a share.

Fresh-start reporting

The reorganisation and related one-time items Delta accounted for in the second quarter of this year stemmed from US$1.5 billion (euro1.09 billion) of income primarily due to the discharge of claims and liabilities in connection with its bankruptcy proceedings and the adoption of fresh-start reporting.

Revenue in the April-June quarter rose to US$5 billion (euro3.63 billion), compared to US$4.74 billion (euro3.44 billion) recorded in the same period a year earlier.

At the end of the quarter, Delta had US$3.7 billion (euro2.69 billion) in cash, cash equivalents and short-term investments, of which $3.4 billion (euro2.47 billion) was unrestricted.

Delta also has an additional US$1 billion (euro0.73 billion) in unrestricted liquidity available under its undrawn revolving credit facility.

Delta recorded roughly US$40 million (euro29.03 million) in cash gains on fuel hedge contracts settled during the quarter.

For the first six months of the year, Delta said its net income was US$1.64 billion (euro1.19 billion), compared to a loss of US$4.28 billion (euro3.11 billion) for the same period a year earlier.

Per-share figures were not given. Six-month revenue rose to US$9.24 billion (euro6.71 billion), compared to revenue of US$8.54 billion (euro6.2 billion) in the same period a year earlier.

Delta entered Chapter 11 on September 14, 2005. The company emerged on April 30.

In bankruptcy, Delta shed billions in costs and restructured the carrier's operations. It also survived a hostile takeover bid by Tempe, Arizona-based US Airways Group Inc.

After exiting bankruptcy, Delta unveiled plans for a new paint job for its planes, featuring the company's three-dimensional red logo flying across a blue background on the tail of aircraft.

Delta's board still must find a new chief executive officer to replace outgoing CEO Gerald Grinstein and decide whether to sell or spin off regional feeder carrier Comair.

The airline has not provided a specific timetable for either decision.

The top internal candidates for CEO are Chief Financial Officer Ed Bastian and Chief Operating Officer James Whitehurst.

No external candidates have been mentioned publicly.

- AP