Shares of Delta Air Lines rose more than 5.48% in premarket trading on Thursday after the carrier forecast a stronger end to 2025, supported by higher airfares and a recovery in both corporate and luxury travel.
DAL expects Q4 adjusted profit of $1.60 to $1.90 per share vs. analysts’ estimate of $1.66, according to data compiled by LSEG.
The company also raised its full-year EPS guidance to $6 per share, tightening its previous forecast range of $5.25 to $6.25.
Analysts surveyed by FactSet had expected $5.80.
The upbeat guidance and solid third-quarter results lifted broader airline stocks, with United Airlines, American Airlines, JetBlue, and Alaska Air each gaining between 2% and 5%.
The Atlanta-based airline said sales momentum had accelerated across all geographies over the past six weeks, with business bookings showing broad-based improvement across industries.
“Starting in July, cash sales picked up,” said CEO Ed Bastian, noting that demand has held steady despite inflationary pressures and uneven consumer confidence.
Earnings beat expectations as travel demand stabilizes
For the September quarter, Delta reported adjusted earnings of $1.71 per share, topping analysts’ estimates of $1.53, according to LSEG data.
Adjusted revenue climbed 4% year-on-year to $15.2 billion, surpassing the $15.06 billion forecast.
Net profit rose 11% to $1.42 billion, or $2.17 a share, compared with $1.27 billion, or $1.97 a share, a year earlier.
Looking ahead, the company projected adjusted earnings between $1.60 and $1.90 a share for the fourth quarter, exceeding the $1.65 consensus estimate.
Delta expects revenue to grow as much as 4% in the final three months of 2025, well above Wall Street’s 1.7% forecast.
“Looking to 2026, Delta is well positioned to deliver top-line growth, margin expansion and earnings improvement consistent with our long-term financial framework,” Bastian said in the earnings release.
Premium travel drives performance amid rationalized capacity
The carrier’s premium segment remained a key growth driver, with revenue from first-class and extra-legroom economy seats rising 9% to nearly $5.8 billion.
In contrast, main cabin revenue fell 4% to about $6 billion. Premium products now account for roughly 43% of Delta’s passenger revenue.
Bastian said the airline had seen no signs of consumers pulling back from premium travel.
Delta and other US carriers have also trimmed unprofitable routes and reduced midweek flights to curb excess capacity that had previously pressured fares.
Domestic unit revenue rose 2% on a 4% capacity increase during the third quarter, supported by a 5% rise in overall domestic passenger revenue.
With the collapse of Spirit Airlines and a slower pace of expansion among competitors, analysts expect Delta’s pricing power to remain firm into 2026.
Resilient performance despite macro uncertainty
Delta’s full-year adjusted earnings are now expected to reach $6 per share, at the upper end of its earlier forecast range of $5.25 to $6.25.
Despite broader economic uncertainty and the potential fallout from the US government shutdown, Bastian said Delta’s operations had not been affected so far.
The airline’s diversified revenue streams continue to provide a buffer against economic swings.
More than half of its income now comes from sources beyond basic air travel, including credit card partnerships, maintenance services, and cargo.
Delta generated $2 billion from its partnership with American Express in the September quarter, reflecting double-digit growth in spending on its co-branded credit card.
What analysts say about Delta, other airlines stocks as it sets the tone for the sector
Airline stocks have had a bumpy ride through 2025 but are now nearing the point of breaking even for the year.
As the first major US carrier to report results each quarter, Delta Air Lines often sets the tone for the broader sector, providing an early glimpse into industry health and travel demand trends.
The gains of other airline stocks post-Delta’s announcement were testament to this fact.
TD Cowen analyst Tom Fitzgerald said his top picks, Delta and United Airlines, remain “well positioned to continue leading the pack.”
He pointed to a recovery in corporate travel, strong demand for long-haul international routes, sustained appetite for premium seating, and steady loyalty program revenue as key drivers of growth.
Seaport Research analyst Daniel McKenzie maintained a Buy rating on Delta with a price target of $80, calling it “the cleanest story with the best upside surprise potential.”
He added that the broader airline group could see modest gains in the fourth quarter as investor sentiment improves on expectations of a stronger earnings recovery in 2026.
Market analysts remain largely bullish on Delta’s prospects, citing its disciplined capacity management and strong position in the premium travel segment.
The median price target of 23 brokerages covering the stock stands at $68, according to LSEG data, suggesting further upside potential from its last close of $57.12.
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