Delta reports $6.39B quarterly loss

Delta reports $6.39B quarterly loss
Battered airline says high fuel costs and falling market share resulted in a $6.1 billion non-cash charge.

ATLANTA (AP) -- Delta Air Lines Inc., the nation's third-largest carrier, said Wednesday its loss widened in the first quarter to a whopping $6.39 billion because of soaring fuel prices and the steep decline in the company's market value.

The results badly missed Wall Street expectations, despite a 12% increase in sales.

The Atlanta-based company said the loss is equivalent to $16.15 a share. That compares with a loss of $130 million that Delta reported in the year-ago January-March quarter, when it was still in bankruptcy.

Excluding special items, primarily a $6.1 billion non-cash charge relating to the decline in Delta's market value due to sustained record fuel prices, the airline lost $274 million, or 69 cents a share, in the first quarter.

Analysts were expecting a Delta loss of 49 cents, excluding one-time items.

Revenue in the quarter rose to $4.77 billion, compared with $4.24 billion recorded in the same period a year ago. Delta (DAL, Fortune 500) shares rose 10 cents in premarket trading to $6.90, just off a 52-week low of $6.70.

Delta said its first-quarter loss before special items was driven by a $585 million year-over-year increase in the cost of fuel.

Falling shares. Delta's shares have fallen nearly 69% since the airline emerged from Chapter 11 on April 30, 2007.

Delta announced April 14 that it has agreed to acquire Northwest Airlines Corp. (NWA, Fortune 500) in a stock-swap deal that, if approved by regulators and shareholders, would create the world's largest airline. Northwest was also scheduled to release first-quarter results Wednesday.

"Our need to respond to the pressures of dramatically rising fuel costs and a softening U.S. economy drove us to take a closer look at all options to protect Delta's future," Chief Executive Richard Anderson said in a statement. "The merger with Northwest will create an airline with the size, scale and global presence to weather economic downturns and compete long-term in the global marketplace."

Gas and oil prices pushed further into record high territory Tuesday, with retail gas reaching a national average of $3.51 for the first time and crude nearing $120

CNN