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Earnings Preview: Delta Air Lines

ATLANTA (AP) — Delta Air Lines reports first-quarter results on Tuesday, and it's aiming for a profit. What business wouldn't? But first quarters are tough in the airline business, because the end-of-the-year travel season is over. And this year's first quarter had a lot of bumps that might keep Delta from its goal.

WHAT TO LOOK FOR: It was early March when Delta executives said they hoped for a profit during the quarter that ended March 31. Since then, the airline reported lower-than-expected growth in passenger revenue for March because of government spending cuts. It also cited "temporary inefficiencies" as it switched to new technology that helps it decide how much to charge for flights.

Regardless of what happened in the first quarter, though, investors will be looking ahead to Delta's long-term prospects.

"March revenue numbers were disappointing, but we expect (Delta) to see improved revenue momentum in the summer," S&P Capital IQ airline analyst Jim Corridore wrote in a note last week. The summer is the busiest time of year for airlines because vacationers are business travelers are flying in large numbers. Delta's strengths include its successful integration after buying Northwest in 2008, its strong global network, and reduced debt, he wrote.

Still, government spending cuts could be on ongoing problem. In fact the impact on air travel is expected to worsen, with the Federal Aviation Administration warning on Thursday that furloughs of air traffic controllers could snarl air travel beginning on Sunday.

WHY IT MATTERS: Delta is the world's second-biggest airline right now, but more than size, it's trying to be the most stable airline. It reduced flying capacity by 2.6 percent during the quarter because it's more focused on flying that it can do profitably.

Its main competitor is United Airlines, which is still working through its merger with Continental. Delta will fall to No. 3 if the American-US Airways merger is approved. That airline, too, will have teething pains as it tries to put the two operations together. Delta is hoping to win business by avoiding those kinds of problems.

WHAT'S EXPECTED: Analysts surveyed by FactSet expect a profit of 6 cents per share, on revenue of $8.5 billion.

LAST YEAR'S QUARTER: A profit of $124 million, because of fuel-hedging gains of $151 million. If not for those gains, Delta would have lost money. Revenue was $8.41 billion.

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