ATLANTA (AP) -- Delta Air Lines Inc., the world's biggest carrier, said Tuesday it lost $1.4 billion in the final three months of 2008 as it recorded a massive charge related to employee stock awards and wasn't able to fully benefit from the decline in oil prices because of bad bets on fuel hedges. Delta shares fell nearly 18 percent in early trading.

The results, when one-time items are excluded, fell short of Wall Street expectations.

The airline operator also projected that 2009 consolidated passenger unit revenue would be down 4 percent. It reiterated its previously announced plans to cut systemwide capacity 6 percent to 8 percent this year.

The Atlanta-based carrier's net loss in the fourth quarter was equivalent to $2.11 a share for the October-December period, compared to a loss of $70 million, or 18 cents a share, for the same period a year earlier. The loss in the latest quarter included a $904 million charge related to employee equity awards.

Delta had said that when it completed its acquisition of Northwest Airlines, it would issue a nearly 13.4 percent equity stake in the combined airline to employees.

Excluding special items, Delta said it lost $340 million, or 50 cents a share. Analysts surveyed by Thomson Reuters, who generally exclude one-time items from their estimates, expected a loss of 34 cents a share. Delta said the analyst estimates did not factor in a 12 cents per share loss related to the non-cash impact of purchase accounting.

UBS analyst Kevin Crissey said he was focusing on Delta's expected present and future performance rather than its performance in the fourth quarter of last year.

"We were much more concerned with guidance given the noise from the merger in the fourth quarter," Crissey wrote in a research note.

He said Delta's 2009 consolidated passenger unit revenue projection is worse than what his firm had been expecting.

Revenue rose 43 percent to $6.7 billion in the fourth quarter, compared to $4.7 billion a year earlier, as Delta completed its acquisition of Northwest on Oct. 29, during the latest fourth quarter.

Delta said it had a total net loss of $607 million in the fourth quarter related to fuel hedges. After locking in prices that looked reasonable earlier in 2008, some airlines finished the year paying substantially more than market price for a portion of their fuel.

For all of 2008, Delta said it lost $8.9 billion, or $19.08 a share, compared to a profit of $1.6 billion in 2007. The company did not provide a per-share figure for the 2007 profit because it was in bankruptcy during the first four months of that year. Twelve-month revenue rose to $22.7 billion, compared to $19.2 billion for the prior year.

Analysts expect Delta to post another loss for the first quarter of this year, which began Jan. 1, but to start turning a profit after that. With the economy uncertain at best, a spike in fuel prices or a significant further drop in demand could change those projections.

Delta, like other airlines, has been trying to preserve cash to help weather the economic downturn. It also has reduced capacity and cut jobs.

Delta said earlier this month that it expects about 2,000 employees to accept the company's latest round of severance offers that were made due to its plans to reduce systemwide capacity in 2009. The actual total won't be known until after the window for employees to accept the offers ends on Jan. 31.

Delta said Tuesday it ended the fourth quarter with $6.1 billion in total liquidity and cash collateral posted with hedge counterparties.

Delta Air Lines Inc. operates Delta, Northwest Airlines, Comair, Mesaba Airlines and Compass Airlines.

"I want to thank my 85,000 Delta colleagues for their outstanding achievements in 2008 -- a year where we not only faced the severe challenges brought on by over $2 billion in increased fuel costs and the onset of a global recession, but also closed our merger with Northwest and began a smooth integration process," Richard Anderson, Delta's chief executive officer, said in a statement.

He added, "Despite the difficult economic environment, we expect to be solidly profitable in 2009 driven by lower fuel costs, capacity discipline, and merger synergies. Delta people have a great track record for achieving their goals, and I am confident that 2009 will be another successful year."

Delta shares fell $1.75, or 17.7 percent, to $8.18 in early trading Tuesday.