Delta hoping for elusive 1Q airline profit

Delta Air Lines said it might make money in the first quarter, and that its new refinery near Philadelphia will finally be running at full capacity this week after long delays due to bad weather.

Delta president Ed Bastian told analysts on Monday that Delta hopes for a profitable first quarter in what is "by far our most difficult seasonal quarter of the year." He said doing so would be "another milepost along the way to a stable, durable franchise that our investors should expect."

Analysts polled by FactSet expect earnings of 11 cents per share for the period.

The first quarter is always the toughest of the year for airlines. Leisure travelers did a lot of their flying around Christmas and New Year's and are staying home during the first few months of the year that make up the first quarter. Snowstorms can mess up operations. It's common for the first quarter to be a money-loser for airlines.

Per-mile passenger revenue — a key measure in the airline industry — is expected to rise 4.5 to 5.5 percent for the quarter, Bastian said.

Delta's new oil refinery should reach full capacity this week and produce a profit in the second quarter, Bastian said. Delta bought the refinery last year, aiming to cut out the middle man on jet fuel, its single biggest expense.

It had originally hoped for a fourth-quarter profit, but instead the refinery posted a loss. The refinery was impacted "significantly" by Sandy, which struck in late October, and delays lasted into February, Bastian said.

Bastian said the refinery would produce a second-quarter profit of $75 million to $100 million based on current prices.

A test of North Dakota crude oil went well, and Delta is looking to line up deliveries of more of that crude by rail, he said. Like most East Coast refineries, the Trainer refinery uses more expensive overseas oil that arrives by ship.

Shares of Atlanta-based Delta Air Lines Inc. rose 56 cents, or 3.8 percent, to $15.38 in midday trading.