MINNEAPOLIS — Delta Air Lines Inc. said Tuesday that its fourth-quarter profit was nearly wiped out by Hurricane Sandy and special charges.
The storm forced airlines to cancel more than 20,000 flights. The impact was bigger at Delta because Sandy also slowed its operations at its new oil refinery near Philadelphia.
Delta’s goal in restarting the refinery was to maximize jet-fuel production and reduce the airline’s fuel bill. But Sandy slowed the refinery’s restart, and the refinery lost $63 million for the quarter and added 7 cents per gallon to the price of Delta’s jet fuel. Delta said it expects the refinery to be profitable in the current quarter.
Delta said Sandy cut $100 million from its fourth-quarter profit. It recorded another $231 million in special items. What was left was net income for the quarter of $7 million, or a penny per share. During the same period last year Delta earned $425 million, or 51 cents per share.
Without special items, earnings would have been $238 million, or 28 cents per share.
Revenue rose 2 percent to $8.6 billion. Both the adjusted profit and the revenue were slightly better than expected by analysts surveyed by Fact-Set.
Managers said on a conference call that they’re focused on improving profit margins. Delta also said it expects lower fuel prices in the first quarter.
J.P. Morgan analyst Jamie Baker raised his first-quarter profit estimate, citing lower fuel prices and strong travel demand.
Shares of Delta, based in Atlanta, rose 40 cents, or 2.9 percent, to close at $14.01. It was the first time the shares closed above $14.00 since November 2010.
Delta’s 2012 profit rose 18percent to $1 billion, or $1.19 per share. In 2011 it earned $854 million, or $1.01 per share. Full-year revenue rose 4 percent to $36.67 billion.
Delta said it would cut first-quarter flying capacity. Airlines have been trying to keep a lid on growth so they can charge more for the seats that remain.
Delta is the second major airline to report fourth-quarter results, after American Airlines parent AMR Corp. last week said its loss - excluding some items - narrowed to $88 million as the company pared labor and aircraft-leasing costs in bankruptcy.
Delta also said Tuesday that its frequent-flier program will increasingly favor big spenders over people who simply rack up miles.
Most airlines reward how many miles a passenger flies, not how many dollars hespends.
But Delta Air Lines Inc. President Ed Bastian said Tuesday that future changes would likely favor travelers who spend more. That’s Delta’s strongest hint yet that it may move the whole frequentflier program further in that direction.
Last week Delta announced that frequent fliers would need to spend a minimum amount of money to earn a higherfrequent-flier status. Travelers prize that status because it moves them to the front of airport lines and lets them qualify for upgrades to first class.
Two years ago Southwest changed its frequent-flier program to reward more expensive tickets.
Information for this article was contributed by Jane Credeur of Bloomberg News.
Business, Pages 23 on 01/23/2013