Delta Airlines (DAL  ) reported Q4 earnings that beat expectations on the top and bottom-line. The company did note a reduction in bookings during December and January due to the recent omicron-fueled surge in cases. It's also dealing with rising costs due to energy prices and wage pressures. So, it was a pleasant surprise for investors that Delta didn't downgrade its 2022 earnings guidance.

Overall, Delta's shares peaked in March 2021 around $52 once it became clear that the recovery from the pandemic was not going to be a smooth affair despite the development of successful vaccines. Delta's business has certainly rebounded from the depths of the crisis when travel volumes were at 20% of pre-pandemic levels. Prior to omicron, it was at 90% and now is around 70%.

Inside the Numbers

In Q4, Delta reported adjusted earnings per share of $0.22 cents, topping expectations of $0.14. Revenue also beat at $9.47 billion vs $9.21 billion expected. This was about 11% lower than its pre-pandemic Q4. The company also said that due to a decline in bookings in Q1, it will likely post a loss in the quarter. In total, it believes that the company should return to profitability by March.

One silver lining for Delta is that the worst of the omicron surge seems to be over. In addition to affecting demand, its affected airlines' ability to fly due to staff and crew being unavailable. In total, there were 20,000 cancellations during the end of December and the first week of January.

According to Delta, about 10% of its staff tested positive for the coronavirus in the last 4 weeks. One way that its made up for its shortfall is to offer additional pay and perks to staff members who pick up additional shifts. This added an extra $70 million to Delta's expenses. And, the company said that trends are positive as only 1% of its flights were cancelled over the past week.

Despite the worst of the omicron variant being over, Delta does face some potent headwinds that may be more substantial than its tailwind of improving travel volumes. Costs are likely to continue rising as oil is near a new, 52-week high. Additionally, the company will have to increase its workforce in order to meet demand which will be another source of cost pressure. On top of this, it has a higher debt load and diluted shares to raise cash during the pandemic which means that EPS is unlikely to return to pre-pandemic levels even if net income does.