Delta Cuts Profit Forecast on Labor Strife, Weather

NEW YORK —  Delta Air Lines Inc., the No. 3 U.S. airline, said Friday that its fourth-quarter profit will miss expectations after it canceled thousands of flights because of bad weather and pilots refusing overtime.

The company also said it expects fourth-quarter operating revenue to be $65 million to $75 million lower than it had expected.

Airlines have been hit by operational problems from winter storms, and Delta has said many pilots have declined overtime since November to pressure management in contract talks.

The Atlanta-based carrier said earnings per share will be between 55 cents and 65 cents, excluding noncash adjustments for the drop in value of its shares in Priceline.com Inc. and a change in the way it accounts for fuel hedging activities. Delta had earned $1.22 a share in the year-earlier quarter.

Analysts were expecting 81 cents for the latest quarter, according to First Call/Thomson Financial, although estimates had already been sinking amid the labor dispute and winter weather.

Still, the shortfall was worse than analysts had expected.

Earnings in early 2001 could still be hurt as pilot talks continue and “as passengers look to avoid the carrier until its pilot-related operating problems are fixed,” James Higgins, a Credit Suisse First Boston analyst, said in a report.

Delta canceled about 7,500 flights in December, of which more than 3,500 were due to pilot unavailability, the airline said. Delta operates about 2,700 daily flights.

“The winter storms and holiday crowds, combined with reduced additional flying by some Delta pilots, have made this traditionally challenging period one of the most demanding in our history,” said Leo Mullin, Delta’s chairman and chief executive.

Delta said this week it will reduce the number of seats it will fly through March by 2.7% as it strives to avoid cancellations and delays.

Delta shares closed up 25 cents at $52.75 on the New York Stock Exchange.