(Reuters) – Delta Air Lines Inc said on Tuesday it lost $712 million in the fourth quarter largely due to fuel hedge settlements, although the carrier topped analysts’ estimates and offered positive outlook for the start of 2015.

The Atlanta-based carrier lost 86 cents per diluted share, including a $1.2 billion charge for mark-to-market adjustments on fuel hedges, which Delta had announced. Delta also said its refinery produced $105 million in profit.

The airline earned $649 million, or 78 cents per diluted share, excluding special items, compared with the average analyst estimate of 77 cents per diluted share, according to Thomson Reuters I/B/E/S. The Wall Street estimates excluded special charges.

Passenger revenue grew 4.6 percent to about $8.24 billion versus the fourth quarter of 2013, with unit revenue up 0.8 percent.

Although Delta had to pay a hefty premium because its hedges had not bet on oil prices falling, the cascading cost of fuel has been a boon to airlines, including Delta. The carrier said Tuesday it expects to pay between $2.45 to $2.50 per gallon for jet fuel in the first quarter, down from an average $2.62 in the past three months.

Delta has said a 1 cent change in its fuel price is worth $40 million for the carrier.

“It’s painting a very positive outlook for the industry for 2015,” said CRT Capital Group analyst Michael Derchin.

Delta also forecast an operating margin of 11 percent to 13 percent for the first quarter, with cost per available seat mile expected to be flat or rise up to 2 percent year over year, excluding fuel expenses and profit sharing.

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