it won't meet a cost-cutting goal overshadowed better-than-expected earnings.

Delta, which flies to Bermuda from Atlanta and Boston, said its fiscal fourth-quarter profit from operations rose 31 percent to $328 million, or $5.77 a share, from $251 million, or $4.49, in the year-ago quarter. The per-share results are after payment of preferred dividends.

Revenue for the quarter ended June 30 rose 4.4 percent to $3.36 billion from $3.22 billion.

The results far exceeded an average estimate of $3.95 by six analysts surveyed by Zacks Investment Research.

However, Delta said it wouldn't meet its cost-savings goal of 7.5 cents per seat mile by the end of fiscal 1997. The Atlanta-based airline will eventually reach that goal, but "we won't penalise our overall financial performance to do it,'' Ronald Allen, Delta's chairman, president and chief executive, said in a statement.

Shares of Delta fell 2 5/8 to 72 1/4 in midafternoon trading.

The stocks of other airlines also fell. Shares of AMR Corp. fell 3 3/8 to 77 3/4, while UAL Corp. dropped 2 to 45 3/4 and Continental Airlines Inc. fell 1 1/2 to 22 1/2.

Brian Harris, a Lehman Brothers analyst, agreed with Delta's decision not to cut costs faster.

"Delta will make more money with a higher cost structure than 7.5 cents,'' Harris said. He said Delta has higher costs because its flights generally have more connections than those of other airlines.

Delta's aggressive cost-cutting has hurt its financial performance in the past, Harris said.

Still, Delta said it managed to reduce operating expenses by $530 million in fiscal 1996, excluding higher fuel costs and a new federal tax on jet fuel.

Delta said its traffic, measured in revenue passenger miles, grew 11 percent in the fiscal quarter.

Results for the recent quarter don't include a pretax restructuring charge of $273 million. The after-tax figure wasn't immediately available.

The airline's operating costs are currently at about 8.33 percent per seat mile, Harris said.

Delta said it exceeded its goal of reaching an operating margin of ten percent, and that it set a new goal to reach a 12 percent margin in the next three years. Operating margin is operating profit as a percentage of revenue.

For the fiscal year, Delta said its profit from operations more than doubled to $662 million, or $11.13 a share, from $294 million, or $4.07, a year earlier.