Is a Beat in the Cards for Delta Air Lines in Q2 Earnings?

Delta Air Lines, Inc. DAL is scheduled to report second-quarter 2025 results on July 10, before market open.

Delta Air Lines’ earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters, the average beat being 3.96%. However, the company missed the Zacks Consensus Estimate in the remaining two quarters. (See the Zacks Earnings Calendar to stay ahead of market-making news)

Let’s see how things have shaped up for Delta Air Lines this earnings season.

Factors Likely to Have Influenced DAL’s Q2 Performance

The Zacks Consensus Estimate for DAL’s second-quarter 2025 earnings has been revised upward by 1.02% in the past 60 days to 1.99 per share. The consensus estimate lies within the company provided guided range of $1.7-$2.3. However, the consensus mark implies a 15.7% downside from the year-ago actual.

We expect geopolitical uncertainty, tariff-related pressures, and persistent inflation to weigh on DAL’s operations and weaken travel demand, especially in the international and business segments. These headwinds are causing volatility in passenger traffic and limiting the airline’s ability to maintain strong yields and consistent revenue growth. Softening demand is preventing DAL from fully optimizing its network and operating at peak efficiency.

Labor costs are also likely to have been high, which would have hurt the company’s bottom-line performance in the June quarter. We expect expenses on salaries and related costs to increase 13.2% in the to-be-reported quarter from the second quarter of 2024 actuals.

The Zacks Consensus Estimate for DAL’s second-quarter 2025 revenues is pegged at $16.18 billion, indicating a 2.89% decline year over year.Due to the difficult revenue environment, Delta has issued a cautious outlook for the second quarter of 2025, projecting adjusted revenues to either decline 2% or increase up to 2% year over year.

On a brighter note, the southward movement of oil prices bodes well for the bottom-line growth of industry participants. This is because fuel expenses are a significant input cost for the aviation industry. Crude oil is struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence, and the production increase by OPEC+ have all contributed to this downward pressure. Oil prices decreased by 6% in the April-June 2025 period and by 9% from the beginning of 2025 to date.

What Our Model Says About DAL

Our proven model predicts an earnings beat for Delta Air Lines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Delta Air Lines has an Earnings ESP of +0.26% and a Zacks Rank #3.

Highlights of DAL’s Q1 Earnings

Delta Air Lines reported first-quarter 2025 earnings (excluding 9 cents from non-recurring items) of 46 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Earnings increased 2.2% on a year-over-year basis due to low fuel costs.

Revenues in the March-end quarter were $14.04 billion, surpassing the Zacks Consensus Estimate of $13.81 billion and increasing 2.1% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 3.3% year over year to $13 billion.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

SkyWest, Inc.SKYW has an Earnings ESP of +3.06% and a Zacks Rank #2 at present. SKYW is scheduled to report second-quarter 2025 earnings on July 24. You can seethe complete list of today’s Zacks #1 Rank 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.

SKYW has an impressive earnings surprise track record, having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 17.1%. 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. 

United Airlines UAL has an Earnings ESP of +2.16% and a Zacks Rank #3 at present. UAL is scheduled to report second-quarter 2025 earnings on July 16.  

The Zacks Consensus Estimate for second-quarter 2025 earnings has been revised 6.45% downward in the past 60 days. UAL’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 10.34%.

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

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