Delta beats analysts’ 3rd-quarter estimates

Delta Air Lines Inc. reported a third-quarter profit Thursday that beat analysts’ estimates, buoyed by higher fares on routes in the U.S., and said it’s not seeing any effect from Ebola concerns among fliers.

“You really can’t catch Ebola flying on an airplane,” Chief Executive Officer Richard Anderson said during a conference call.

Delta, the f irst major U.S. carrier to report quarterly earnings, said bookings have been unchanged since the first U.S. Ebola case and two subsequent infections for nurses who cared for that patient. Even with a very low risk of transmission on a jet, Delta speaks regularly with flight crews about the disease and cleans its aircraft with disinfectants, executives said.

The Atlanta-based airline said that net income fell to $357 million from $1.37 billion a year earlier. Profit excluding some items was $1.20 per share. That topped the $1.18 average of 18 estimates compiled by Bloomberg. Delta said it expects a “record fourth quarter” with operating margins of 10 percent to 12 percent, up from 7.7 a year earlier.

Anxiety about contagion was heightened after one of the nurses flew to Dallas from Cleveland on Frontier Airlines this week with a slight fever. No Delta pilots or flight attendants are opting out of flying on certain routes, including those to Africa, Chief Human Resources Officer Joanne Smith said.

“As fears surrounding Ebola subside, we expect the market to give credit to Delta for the strong results,” Helane Becker, an analyst at Cowen & Co., said in a note to clients. “We continue to believe that Ebola will have little to no impact on the traveling public even if we have heard that people are wearing masks on aircraft.”

Delta shares rose 94 cents, or 2.9 percent, to close Thursday at $ 33.32. They gained 18 percent this year through Wednesday, as American Airlines Group Inc. climbed 26 percent and United Continental Holdings Inc. rose 12 percent.

While it doesn’t view Ebola as a threat to earnings, Delta is taking steps to counter weakness in overseas markets including the Pacific region. It’s planning capacity cuts in the “high single digits” in the Pacific and retiring four more Boeing 747s next year, beyond the four it already announced this year, President Ed Bastian said during the call. Delta intends to phase out the last of the 16 747s in its fleet by 2017, Anderson said Thursday.

Even as it reduces seats to some markets, the thirdlargest U.S. carrier increased domestic capacity by almost 5 percent last quarter while chasing high fares, Bloomberg Intelligence analyst George Ferguson wrote in a note Oct. 7. He said in a later note that international markets “appear overcrowded.”

The six major U.S. airlines are expected to report combined profit of $3.9 billion, excluding some items, analyst estimates compiled by Bloomberg show.