DELTA AIR LINES FLIES HIGH WITH 15% STOCK JUMP – BUT HOLD ON! NO FULL-YEAR OUTLOOK!!!
In a shocking turn of events, Delta Air Lines (NYSE: DAL) just lit up Wall Street with a jaw-dropping 15% surge in shares after unveiling earnings that flew past expectations for the first quarter of 2025! But don’t pop those champagne bottles just yet – the airline is throwing a wrench in the works by WITHDRAWING its full-year forecast, citing a dark cloud of global economic uncertainty hanging over the industry!
Earnings OUTSHINE Forecasts!
Hold onto your seats! Delta’s operating revenue for Q1 2025 skyrocketed to a staggering $14 billion, smashing estimates of just $13.93 billion! But wait, it gets even juicier: adjusted operating revenue ticked up 3.3% to $12.98 billion! And can you believe it? GAAP earnings per share catapulted to $0.37, a massive leap from last year’s measly $0.06! Adjusted EPS? It rose 2% to $0.46, CRUSHING expectations of $0.40!
Warning Signs of a Slowdown!
But before you start planning that dream vacation, pump the brakes! Delta’s earnings report isn’t all sunshine and rainbows. The airline’s growth is hitting turbulence due to uncertainty surrounding global trade. Delta is hitting the brakes on capacity growth for the latter half of the year, opting for a flatter approach while trying to safeguard its cash flow and margins!
The diverse revenue streams managed to hold strong, claiming nearly 60% of total revenue, but corporate travel is slowing down! Revenues from corporate clients crawled up in the low single digits. What’s happening people?!
Revenue Breakdown: What’s the Scoop?
Passenger revenue climbed to $11.5 billion, but here’s the kicker: domestic revenue limped up only 1%, while international revenue fared slightly better, with a mid-single-digit growth. Pacific sales thrived with an astonishing 16% increase thanks to double-digit capacity growth, while transatlantic and Latin American revenues settled for a modest 5% boost.
Capacity Struggles Ahead!
Although capacity did expand by 4%, total revenue per available seat mile (TRASM) took a hit, down 2% in Q1. And unit costs? They spiked by 2.6%! Uh-oh!
The Future Looks Foggy!
As we look toward the June quarter, Delta is cautiously optimistic, predicting resilience in premium sectors, loyalty programs, and international travel, which could balance out the domestic weakness. But despite those glimmers of hope, the airline is staying mum on its full-year predictions, insisting they’ll update us later when there’s clearer visibility.
What’s Next? Dollar Signs or Turbulence?
Now for Q2 2025, Delta hinted at a rollercoaster ride with adjusted revenues expected to dip 2% to rise 2% YoY, while adjusted EPS is projected to float between $1.70 and $2.30. Buckle up, folks! The skies ahead are unpredictable! Are you ready for what’s next? Stay tuned!
