Delta posts 2Q loss as fuel costs soar

Delta, which has agreed to buy Northwest Airlines Corp, said adjusted second-quarter income was $137 million, or 35 cents a share, a decrease from the $274 million reported in the year-ago period. The average estimate from analysts polled by Thomson Reuters was for earnings of 10 cents a share.

The Atlanta-based company also said it is due to receive $2 billion in cost savings by 2012 from its acquisition of Northwest Airlines.

Delta said its adjusted income fell because of "unprecedented fuel prices," though this was offset by an increase in operating revenue from international expansion.

Revenue rose around 10 percent to $5.5 billion, surpassing analysts' expectations of $5.41 billion.

The airline expects to end the year with liquidity of $3.2 billion, including $1 billion under its revolving credit facility.

In March, Delta announced plans to slash 2,000 jobs by offering voluntary retirement and "early out" programs, but in June said more than 4,000 employees had chosen to take part in the programs.

Delta said its merger with Northwest Airlines is expected to close during the fourth quarter of this year.

Delta shares were up $1.07, or 23 percent, at $5.74 in late morning on the New York Stock Exchange trade. They have fallen from a 52-week high of $21.80 set on July 19, 2007.