Delta Air Lines beats Q2 adjusted revenue estimates on broad demand, affirms FY adj EPS guidance

Delta Air Lines, Inc.

Delta Air Lines, Inc.

DAL

0.00


Overview

  • US airline's Q2 adjusted revenue rose ~14% yr/yr, driven by broad demand strength, and beats estimates

  • Adjusted EPS for Q2 fell 26% yr/yr as fuel costs surged

  • Company announced 15% dividend increase for September quarter, affirms full-year guidance


Outlook

  • Delta affirms full-year 2026 adj EPS guidance of $6.50-$7.50 and free cash flow of $3-$4 bln

  • Company expects September qtr revenue to grow up mid-teens YoY, with EPS of $2.00-$2.50

  • Delta sees September qtr operating margin of 11%-13%


Result Drivers

  • BROAD DEMAND - Delta said Q2 revenue growth was driven by broad demand strength and growing brand preference

  • DIVERSIFIED REVENUE - Diverse, high-margin revenue streams such as premium products, maintenance, cargo, and loyalty contributed to revenue growth

  • FUEL COSTS - Q2 results were negatively impacted by a 77% yr/yr increase in adjusted fuel expense, reaching the highest quarterly fuel expense in company history


Company press release: ID:nPn6vR2gqa


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Adjusted Operating revenue

Beat

$17.67 bln

$17.53 bln

Q2 EPS

$2.44

Q2 Net Income

$1.60 bln

Q2 Operating Margin

9.40%


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 26 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the airlines peer group is "buy"

  • Wall Street's median 12-month price target for Delta Air Lines Inc is $105.00, about 18% above its July 9 closing price of $89.00

  • The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago


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