Delta, AMR swing to loss, beat Wall Street view

But the carrier's shares soared as the results, hit by unprecedented fuel costs and a decline in the company's market value, still beat Wall Street estimates when one-time items are excluded. Oil prices plunged by more than $4 a barrel Wednesday, bolstering stocks in the airline sector.

The parent of American Airlines also reported second-quarter results Wednesday, swinging to a big loss in the second quarter as high fuel prices swamped an increase in revenue and led the nation's largest carrier to write down the value of its jets. The results were not as bad as Wall Street had feared, as both companies topped analysts' expectations.

Atlanta-based Delta said it expects $2 billion in cost savings by 2012 from its acquisition of Northwest Airlines Corp. That is double what it estimated when it announced the deal on April 14. It also said it expects to spend only $600 million in cash to integrate the two companies, compared to an earlier projection of $1 billion.

"Liquidity preservation is right at the top of our priorities," Ed Bastian, Delta's president and chief financial officer, told analysts in a conference call.

He said the company is looking at unspecified cash-raising opportunities. He suggested in a later call with reporters that a sale of Delta's regional carrier, Comair, is not in the company's near-term future.

Bastian said "it's going to be very hard to get the right amount of cash or liquidity in this fuel environment" for just about any airline.

He told reporters Delta is studying a fee imposed by several carriers on the first piece of checked baggage. But, he said, "We have no plans to implement it at this point."

For the three months ending June 30, Delta said it lost $1.04 billion, or $2.64 a share, compared to a profit of $1.59 billion a year ago when Delta emerged from bankruptcy protection. It did not provide a per-share figure for the year-ago period. A year ago, it reported a different figure for its net income--$1.77 billion--which a spokeswoman said Wednesday was due to fresh-start accounting.

Excluding one-time items, Delta earned a profit of $137 million, or 35 cents a share, in the second quarter. Analysts polled by Thomson Financial, on average, forecast profit of 10 cents a share. Their estimates usually do not include one-time items.