Delta Airlines missed its profit estimates for the first time in two years and cut its 2026 profit outlook as high fuel prices persist, but CEO Ed Bastian said higher fares were not putting off travelers.
Delta on Friday forecast full-year earnings per share of between $5.10 and $5.60 on an adjusted basis, compared with its forecast in July, when fuel prices were lower, between $6.50 and $7.50 per share. The company’s forecast for the fourth quarter was also lower than analysts’ estimates.
Delta lowered its free cash flow forecast for the year to $2.5 billion, down from $4 billion forecast in July.
Tune in at 7:10 a.m. ET as Delta CEO Ed Bastian joins CNBC TV to discuss the results. Watch in real time on CNBC+ or the CNBC Pro stream.
Bastian nonetheless said in an interview that fares have continued to rise as the airline passes on a $6 billion increase in fuel costs this year and travelers continue to book.
“Consumer response continues to be quite strong. We’re seeing it across all channels, across all service booths, across geographies, business and leisure,” he said.
Delta expects a 20% increase in fourth-quarter revenue from the same period last year, more than the 16% rise in the third quarter, taking into account the airline’s profit at its Trainer, Pa., refinery, where it refines crude oil into jet fuel and other products, giving it an advantage over other carriers.
“Obviously the price of fuel and its volatility has something to do with it,” Bastian said.
Delta is the nation’s most profitable airline and the first to report third-quarter results, which encompasses the busy summer season.
Costs continued to weigh on results. Soaring fuel prices since the start of Iran’s war in February have dampened airline profits, although carriers exercise some discretion over pricing. The latest inflation reading in September showed airfares rising more than 23% from a year earlier.
Here’s what the company reported for the third quarter compared to what Wall Street expected, based on LSEG consensus estimates:
- Earnings per share: $1.72 adjusted vs. $1.75 expected
- Adjusted income: $17.59 billion adjusted versus $17.67 billion expected
Delta reported net income of $756 million, or $1.15 per share, down 47% from $1.42 billion, or $2.17 per share, a year earlier. Taking into account non-recurring items, Delta posted earnings of $1.76 per share.
Including sales from its refining, servicing and profit-sharing businesses, revenue increased 16% from a year earlier to $17.59 billion. Operating revenue jumped 21% in the third quarter to $20.19 billion.
Delta’s premium revenue, which now represents a larger share of its total sales, rose 18% in the third quarter to $6.82 billion, while main cabin sales rose just 12% to $6.8 billion.
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