Zacks Earnings Trends Highlights: United Air and Delta's

Immediate Release

Chicago, IL – April 17, 2025 – Zacks Director of Research Sheraz Mian says, "Guidance is always the most important aspect of any earnings season, but it will be an even more significant part of the Q1 reporting cycle."

A Tentative Start to Q1 Earnings Season

Note: The following is an excerpt from this week’sEarnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

• Total Q1 earnings for the 44 S&P 500 members that have reported results are up +6.9% from the same period last year on +5.8% higher revenues, with 72.7% beating EPS estimates and 70.5% beating revenue estimates.
• We continue to believe that this earnings season is less about what companies earned in the first quarter of 2025 and more about sizing up the earnings impact of the emerging tariff and macroeconomic backdrop. Guidance is always the most important aspect of any earnings season, but it will be an even more significant part of the Q1 reporting cycle.
• Q1 earnings for the ‘Magnificent 7’ group of companies are expected to be up +12.5% from the same period last year on +11.4% higher revenues. Excluding the ‘Mag 7’ contribution, Q1 earnings for the rest of the index would be up +5.2% (vs. +6.8%).
• For 2025 Q2, total S&P 500 earnings are expected to be up +8.6% from the same period last year on +4.1% higher revenues. Estimates for the period have started coming down, which aligns with the negative trend we experienced before the start of the Q1 earnings season.

The Evolving Earnings Outlook

There were no major surprises in the big bank results, with all the major players beating estimates and providing a cautious view of the macro backdrop.

Uncertainty about the big picture is a net negative for the earnings outlook, as the lack of visibility is expected to weigh on expectations, even in the absence of explicit management guidance.

United Air Lines UAL didn’t follow Delta’s DAL lead on the guidance front, but we wouldn’t be surprised if United’s guidance proves to be the exception this reporting cycle. The magnitude of uncertainty is so high that most management teams that already provide explicit guidance will likely either withdraw the outlook altogether or lower the bounds of their guided range.

We are starting to see this in the revisions trend, both for the current period (2025 Q2) as well as full-year 2025.

While estimates for this year have started coming down lately, there haven’t been a lot of changes to estimates for the next two years at this stage. It is reasonable to expect these estimates to be adjusted downward as the effects of slowing U.S. economic growth and tariffs begin to be reflected in diminished corporate profitability.

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