Delta cuts full-year outlook after earnings miss
Delta Air Lines reported adjusted third-quarter EPS of $1.72 versus FactSet estimates of $1.77 and lowered full-year EPS guidance to $5.10 to $5.60 from $6.50 to $7.50. The company said fuel expenses jumped 62% in the quarter and expects $4.25-a-gallon jet fuel in the fourth quarter.
By Callum Keown Delta Air Lines stock was falling ahead of the open Friday after the carrier missed earnings expectations and cut its full-year guidance. 6 billion. But high jet-fuel prices are really starting to hurt the industry. 50.
50. 77. 1 billion in the third quarter compared with the year-ago period. 61 per gallon.
25 a gallon in the fourth quarter. 5 billion this year, absorbing an eye-watering $6 billion increase in fuel costs, CEO Ed Bastian said. 8% fall ahead of the open. S.
conflict with Iran started on Feb. 28 -- jumping around 60% since reaching wartime lows in June. That poses a problem for airlines this earnings season and for the rest of the year. Carriers have relied on strong travel demand, increases to airfares, and capacity cuts to mitigate the impact of surging fuel costs.
Delta's earnings suggest demand is holding up and when it comes to capacity cuts, Chief Commercial Officer Joe Esposito said it was reducing main cabin seats with total seats growing less than 2% in the fourth quarter. "With earnings season upon us, the prevailing question among investors is how the industry plans to respond to higher fuel prices," Deutsche Bank analyst Michael Linenberg said earlier this week. His view is that higher airfares may be the response but warned it could start having an impact on demand.
Delta is one of just four airlines Deutsche Bank sees being profitable this year with average jet-fuel prices staying just under $4 a gallon -- United Airlines, Southwest Airlines, and Allegiant are the others. Delta has comfortably outperformed its peers, rising 18% so far in 2026 as of Thursday's close. Rivals United Airlines and American Airlines have fallen 4% and 17%, respectively. However, it hasn't been immune to the recent pressure -- Delta's shares have fallen 6% over the past three months.
Its peers have just had it worse. It's beating its rivals for several reasons -- including its strength in the premium travel category, where passengers are more likely to accept higher fares. That was in evidence again in the third quarter as premium revenue jumped 18%. It has other strings to its bow, such as cargo revenue, which climbed 29% and MRO (maintenance, repair, and overhaul) revenue, up 28%.
Owning a refinery in Trainer, PA has also helped. 6 billion in the third quarter. 3 billion, helping to offset the huge increase in fuel costs. The benefit could really come into its own in the fourth quarter, when Delta expects the refinery to save around 40 cents a gallon fuel prices.
With jet-fuel prices remaining high, the carrier will maintain its advantage. com This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires October 09, 2026 08:08 ET (12:08 GMT) Copyright (c) 2026 Dow Jones & Company, Inc.
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