Delta Air Lines has reported financial results for the three months to June 30th, revealing pre-tax income of $1.4 billion, excluding special items, an increase of $593 million over the same period last year.

Delta’s net income for the period stood at $889 million, or $1.04 per diluted share, and its operating margin was 15.1 per cent, excluding special items.

On a GAAP basis which includes special items, Delta’s pre-tax income was $1.3 billion, operating margin was 14.9 per cent and net income was $801 million, or $0.94 per diluted share.

“Delta’s performance this quarter, with nine per cent top line growth, more than four points of margin expansion and $1.5 billion of free cash flow, shows the financial strength and resilience of our company,” said Delta chief executive officer Richard Anderson.

“We expect our September quarter performance will be even stronger, as we expand our operating margins to 15-17 per cent and further improve our profitability.

Results include $340 million in profit sharing expense in recognition of Delta employees’ contributions toward achieving the company’s financial goals.

As of mid-July, the company has used its strong cash generation in 2014 to reduce its adjusted net debt below $8 billion, contribute more than $900 million of funding to its defined benefit pension plans, and return $550 million to shareholders through dividends and share repurchases.
 
“A solid demand environment, coupled with higher revenues from our corporate contract gains, merchandising efforts, and investments in New York and Seattle, helped offset weakness in Pacific yields and resulted in a nearly six per cent increase in Delta’s unit revenues for the June quarter,” said Ed Bastian, Delta president.

“For the September quarter, we expect unit revenues to increase 2 to 4 percent, driven by continued corporate and domestic strength, along with benefits from our revenue initiatives.”