Delta Stock Up On Q1 Results Above Market; Withdraws FY25 View

Delta Air Lines

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(RTTNews) - Shares of Delta Air Lines Inc. were gaining around 4 percent in the pre-market activity on the NYSE after the airline reported Wednesday higher first-quarter results, above market estimates. The company also issued second-quarter outlook, and said it is not reaffirming or updating its previously given outlook for fiscal 2025 due to the lack of economic clarity.

Delta noted that 2025 is playing out differently than it expected at the start of the year. The firm will provide an update later in the year as visibility improves.

Ed Bastian, Delta's chief executive officer, said, "With broad economic uncertainty around global trade, growth has largely stalled. In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures.... Given our position of strength, our bias toward action and the decline in fuel prices, Delta remains well positioned to deliver solid profitability and free cash flow for the year."

For the June ending second quarter, the company projects profitability of $1.5 billion to $2 billion, adjusted earnings per share of $1.70 to $2.30 and operating margin of 11 percent to 14 percent.

The Wall Street analysts on average expect the company to earn $2.23 per share. Analysts' estimates typically exclude special items.

Based on current trends, June quarter's total revenue is projected to be down 2 percent to up 2 percent over prior year.

In the previous year's second quarter, adjusted earnings were $2.36 per share on revenues of $16.66 billion.

The company expects non-fuel unit cost growth consistent with long-term target of up low-single digits in the second quarter and through the rest of the year.

In its first quarter, Delta Air Lines' earnings came in at $240 million or $0.37 per share, significantly higher than $37 million or $0.06 per share last year.

Adjusted earnings were $298 million or $0.46 per share for the period, compared to prior year's $288 million or $0.45 per share. Analysts had expected the company to earn $0.39 per share.

Operating income, meanwhile, dropped 7 percent from last year to $569 million and operating margin fell 0.5 percentage points to 4 percent.

Adjusted operating income of $591 million fell 8 percent and adjusted operating income of 4.6 percent dropped 0.5 percentage points.

The company's revenue for the period rose 2.1 percent to $14.04 billion from $13.75 billion last year. The Street was looking for revenues of $13.46 billion for the quarter.

Total adjusted revenue of $12.98 billion grew 3.3 percent from the prior year, driven by the resilience of diversified revenue streams, which contributed nearly 60 percent of total revenue and grew mid-single digits over prior year.

In the quarter, Passenger revenues grew 3 percent year-over-year to $11.48 billion, and cargo revenues climbed 17 percent to $208 million.

Total revenue per available seat mile or TRASM fell 2 percent to 20.53 US cents. Adjusted total unit revenue was down 1.0 percent.

In the pre-market activity on the NYSE, Delta shares were trading at $37.22, up 3.7 percent, after losing around 4 percent on Tuesday's regular close.

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