Delta Air Lines Inc. DAL kicked off the first-quarter earnings season in the airline space on a mixed note. The airline behemoth reported lower-than-expected revenues but impressive earnings in the quarter. The Atlanta, GA-based carrier’s first-quarter earnings (excluding special items) of $1.32 per share beat the Zacks Consensus Estimate by $0.03. Earnings also more than doubled, thanks to low fuel costs. Operating revenues came in at $9,251 million, marginally short of the Zacks Consensus Estimate of $9,285 million. Revenues declined 1.5% from the year-ago figure. The top line was hurt by adverse foreign currency movements which impacted the top line to the tune of $125 million. The terrorist attacks in Brussels last month also impacted revenues. During the quarter, passenger revenues and cargo revenues declined 2% and 25.3%, respectively, while other revenues improved 6.3% year over year. The average fuel price in the first quarter was $1.33 per gallon, down 54.6% year over year. Operating Statistics Revenue passenger miles (a measure of air traffic) went up 3.3% year over year to 47.72 billion. Capacity or available seat miles climbed 2.7% to 58.14 billion. Load factor (percentage of seats filled by passengers) improved 40 basis points year over year to 82.1% as growth outweighed capacity expansion in the quarter. Passenger revenue per available seat mile (PRASM) declined 4.6% year over year to 13.35 cents mainly owing to currency woes. Operating Expenses Total operating expenses, including special items, declined 3% year over year to $7,711 million. Consolidated unit cost or cost per available seat mile (CASM), including profit sharing, climbed 4.5%. Liquidity At the end of the first quarter of 2016, Delta had $1.71 billion in cash and cash equivalents and adjusted net debt of $7 billion. The company has managed to reduce its net debt significantly from the 2009 levels. The company generated free cash flow of $497 million and adjusted operating cash flow of $1.35 billion in the first quarter of 2016. Dividend and Share Repurchase Delta returned $882 million to its shareholders through dividends ($107 million) and buybacks ($775 million) in the quarter under review. We are impressed with the company’s efforts to return greater value to shareholders. Second-Quarter Guidance For the second quarter of 2016, the carrier expects operating margin in the range of 21% to 23%. The estimated fuel price, including taxes and hedges, is projected in the band of $1.48 to $1.53 per gallon. System capacity is likely to rise 2% to 3% on a year-over-year basis. Meanwhile, passenger unit revenue is projected to decline in the range of 2.5% to 4.5% Zacks Rank Delta currently carries a Zacks Rank # 3 (Hold). Better-ranked stocks in the airline space include Deutsche Lufthansa Aktiengesellschaft DLAKY, China Eastern Airlines Corp. Ltd. CEA and Air France-KLM SA AFLYY. All the three stocks sport a Zacks Rank #1 (Strong Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AIR FRANCE-ADR (AFLYY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research