Delta's Shares Move North After Q2 Earnings & Revenues Beat Estimates

Delta Air Lines DAL reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.

Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion. 

Delta restored its full-year 2025 guidance, which it had suspended after the first-quarter 2025 earnings report. The carrier now expects earnings to be in the range of $5.25-$6.25 per share. The Zacks Consensus Estimate is currently pegged at $5.11 per share. Free cash flow is anticipated between $3 billion and $4 billion.

The earnings and revenue beat, apart from the restoration of the full-year guidance, pleased investors. As a result, DAL stock was up significantly in early trading.

Delta Air Lines Price, Consensus and EPS Surprise

Delta Air Lines, Inc. price-consensus-eps-surprise-chart | Delta Air Lines, Inc. Quote

Other Details of DAL’s Q2 Results

Passenger revenues, which accounted for 83.3% of total revenues, were flat year over year at $13.9 billion, beating our estimate of $13.6 billion. Domestic passenger revenues declined 1% year over year. International revenues increased 2%, driven by an 11% increase in revenues from the Pacific region.

Cargo revenues improved 7% year over year to $212 million, which surpassed our estimate of $199.1 million. Other revenues decreased 2% to $2.6 billion, which was in line with our estimate.

Adjusted operating margin was 13.2% in the second quarter of 2025 compared with 14.7% a year ago.

Below, we present all figures (in percentage terms) in comparison with second-quarter 2024 results.

Revenue passenger miles (a measure of air traffic) increased 2% to 66.4 billion. Capacity (measured in available seat miles) expanded 4% to 77.4 billion. The load factor (percentage of seats filled by passengers) decreased 180 basis points to 86%, below our estimate of 86.4%.

Passenger revenue per available seat mile declined 4% to 17.68 cents. Passenger mile yield declined 2% to 20.88 cents. On an adjusted basis, total revenue per available seat mile inched down 3% to 19.97 cents.

Total operating expenses, including special items, increased 1% to $14.55 billion. Salaries and related costs rose 10% to $4.4 billion. This increase was due to higher wages stemming from the contract with pilots that was ratified in 2023. Fuel gallons consumed jumped 4% to $1.11 billion. Average fuel price per gallon (adjusted) fell 14% to $2.26. Non-fuel unit cost (adjusted or CASM-Ex) increased 2.7% to 13.49 cents.

DAL exited the second quarter of 2025 with cash and cash equivalents of $3.33 billion compared with $4.11 billion at the end of the second quarter of 2024. The company had an adjusted net debt of $16.3 billion at the end of the June quarter, a reduction of $1.7 billion from the 2024-end. Adjusted operating cash flow in the June quarter was $1.8 billion, with gross capital expenditures and free cash flow of $1.2 billion and $733 million, respectively.

DAL Issues Q3 Guidance

Delta, currently carrying a Zack Rank #3 (Hold), expects third-quarter 2025 adjusted earnings per share in the $1.25-$1.75 band. The Zacks Consensus Estimate is currently pegged at $2.01 per share.

The adjusted operating margin is expected in the 9-11% band. With air-travel demand stabilizing, revenues on an adjusted basis are expected to either remain flat or increase up to 4% from the third quarter of 2024 level.

Transportation Stocks to Consider

Investors interested in the Zacks Transportation sector may consider SkyWest SKYW and Kirby Corporation KEX, both currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SkyWest, founded in 1972, is based in St. George and operates regional jets for major U.S. airlines. SKYW is the holding company for SkyWest Airlines, SkyWest Charter and SkyWest Leasing, an aircraft leasing company. The Zacks Consensus Estimate for second-quarter 2025 earnings has been revised 1.30% upward in the past 60 days. SKYW’s second-quarter 2025 earnings are expected to grow 28.5% year over year. 

SKYW’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters by an average of 17.1%. SkyWest has reported impressive traffic numbers over the past few months.

Kirby has an expected earnings growth rate of 18.7% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5%. Shares of KEX have rallied 10.5% year to date.

Favorable market conditions at the marine transportation unit and consistent efforts to reward shareholders through share buybacks bode well for Kirby's prospects. Kirby has a solid balance sheet. 

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This article originally published on Zacks Investment Research (zacks.com).

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