Delta Air Lines Inc.’s shares were up nearly 10 percent in early trading on April 9, after the Atlanta-based carrier reported better-than-expected first-quarter earnings and paused its yearly profit and sales outlook.
Despite the current “slow-growth environment” due to global trade uncertainty surrounding U.S. tariff policy, Delta CEO Ed Bastian said that the nation’s largest airline carrier was well-positioned to handle the “microeconomic environment” with a strong balance sheet and a strong international portfolio.
According to FactSet, Wall Street had expected the U.S. airline giant to report first-quarter earnings of $0.38 per share on revenue of $12.98 billion.
Given the lack of economic clarity surrounding global trade and tariffs, Bastion warned that providing an updated full-year outlook was premature.
Ahead of the earnings report on April 9 and the recent sell-off on Wall Street, analysts forecasted Delta’s yearly earnings at $5.88 per share in 2025, according to FactSet.
During the conference call with Wall Street analysts, Bastion further cautioned investors that he expects the slower-growth environment to continue well into the remainder of 2025 as the global trade war unravels and tariff questions are resolved.
He said Delta’s main cabin bookings, which were up 10 percent at the beginning of the year, have slowed substantially as consumer and business travelers cut travel budgets in the first quarter.
“In this uncertain environment, our focus is taking action on those areas we can control—protecting margins and free cash flow,” Bastion said.
Regarding concerns about a possible recession amid flailing consumer confidence and slowing growth, Bastion said Delta is actively monitoring company costs and cash flow. He noted that Delta now expects to see $1.5 billion–$2 billion in profits in the second quarter and operating margins of 11–14 percent.
The company said it will update its full-year 2025 financial guidance later this year once the current macroeconomic uncertainty stabilizes.
Currently, Delta operates more than 450 Airbus aircraft from the A220 to the A350-900, with more than 200 additional on order. The A350-1000 will be a new aircraft type in Delta’s fleet.
In a research note provided to The Epoch Times, Bank of America analyst Andrew Didora said Delta has more upside than its rival domestic carriers and is prepared to handle a possible downturn. He said Delta was the first airline to call out “the recent reduction in consumer and corporate confidence caused by increased macro uncertainty.”
“Delta is a well-run airline with industry-leading operations, consistent pretax earnings pre-pandemic, and a focus on staying capacity disciplined,” Didora said.
“[Delta’s] free cash flow potential the next few years [$3 billion to $5 billion annually] is the most differentiating factor between DAL and other airlines.”
Earlier this month, Delta and other domestic carriers revised their first-quarter earnings outlooks because of global economic uncertainty, including around U.S. tariff policy. United Airlines, American Airlines, and Southwest Airlines are expected to release their first-quarter earnings in the second half of this month.
