In this article, Delta Air Lines’ first-quarter outlook on Friday exceeded analyst expectations as the carrier anticipated robust travel demand to kick off the year, which CEO Ed Bastian stated could potentially be the carrier’s best ever. Delta projected generating over $4 billion in free cash this year, marking an 18% increase from 2024 and falling within its annual target range of $3 billion to $5 billion. For the full year, it anticipates annual adjusted earnings to surpass $7.35 per share.
Bastian expressed confidence in the company’s prospects for the new year, noting that consumers are consistently prioritizing experiences over material goods. This positive trend positions Delta for what Bastian described as “our best financial year in our history.”
In the three months ending Dec. 31, Delta’s performance compared favorably with Wall Street expectations based on consensus estimates from LSEG. The airline projected a 7% to 9% increase in revenue, surpassing the approximately 5% growth forecasted by analysts. Delta also expects first-quarter earnings per share to range between 70 cents and $1, slightly exceeding Wall Street’s predictions of 65 cents to 97 cents.
As the first major U.S. carrier to report earnings this quarter, the Atlanta-based airline has benefited from strong post-pandemic travel demand, a trend expected to persist throughout the year. Delta has capitalized on the surge in premium travel, with increasing demand for roomier seats and rewards credit cards.
Delta’s shares surged by 9% in Friday trading, reflecting a broader rally in airline stocks. The company’s American Express partnership generated $2 billion in the fourth quarter, a 14% increase from the previous year. Revenue from premium seats, including first class and premium economy, rose by 8% to $5.2 billion in the fourth quarter, while main cabin ticket revenue increased by 2% to approximately $6 billion.
Unit revenue, a key metric indicating an airline’s revenue relative to its flight capacity, rose by 4% in the fourth quarter compared to 2023. Despite a 59% decline in profit to $843 million in the last quarter of 2023 due to a 7% increase in expenses, Delta’s revenue climbed by 9% to $15.6 billion from the previous year.
After adjusting for one-time items, Delta reported per-share earnings of $1.85 in the fourth quarter, with adjusted revenue reaching $14.44 billion, both surpassing analysts’ estimates. A correction was issued regarding Delta’s first-quarter earnings per share, clarifying the range to be between 70 cents and $1.
