Delta Beats Q4 Earnings & Sales Estimates, Inks Deal on Fleet-Upgrade

Delta Air Lines DAL reported fourth-quarter 2025 earnings (excluding 31 cents from non-recurring items) of $1.55 per share, which beat the Zacks Consensus Estimate of $1.53. Earnings decreased 16.22% on a year-over-year basis due to high labor costs.Revenues in the December-end quarter were $16 billion, beating the Zacks Consensus Estimate of $15.63 billion and increasing 2.9% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year over year to $14.6 billion. Revenue growth was impacted by about 2 points due to the government shutdown, mainly in the domestic segment, consistent with the company's disclosure last month. Fleet UpdateAs part of its fleet modernization efforts, Delta reached an agreement with The Boeing Company BA to acquire 30 787-10 widebody aircraft, with options to purchase an additional 30. Aircraft deliveries are expected to commence in 2031.In addition to enhanced fuel efficiency, the new aircraft are expected to provide better operating economics and expand Delta’s long-haul capabilities. The order represents the next phase of Delta’s international growth strategy, strengthening its global footprint and building on a solid foundation for overseas expansion supported by the airline’s industry-leading domestic network and joint-venture partnerships across all major regions. Delta also signed a separate agreement with GE Aerospace to provide maintenance services for the GEnx engines selected for the aircraft.Delta Air Lines Price, Consensus and EPS Surprise Delta Air Lines price-consensus-eps-surprise-chart | Delta Air Lines QuoteOther Details of DAL’s Q4 ResultsPassenger revenues, which accounted for 80.7% of total revenues, increased 1% year over year at $12.91 billion. Domestic passenger revenues were flat year over year, hurt by the government shutdown. International performance improved significantly on a sequential basis, driven by the transatlantic and Pacific segments. Corporate sales improved across all sectors.Cargo revenues declined 1% year over year to $246 million. Other revenues jumped 14% to $2.84 billion. Adjusted operating margin was 10.1% in the fourth quarter of 2025 compared with 12% a year ago.Below, we present all figures (in percentage terms) in comparison with the fourth-quarter 2024 results.Revenue passenger miles (a measure of air traffic) inched down 1% to 59.86 billion. Capacity (measured in available seat miles) expanded 1.3% to 72.9 billion. The load factor (percentage of seats filled by passengers) decreased 200 basis points to 82%, just below our estimate of 84%.Passenger revenue per available seat mile remained flat at 17.71 cents. Passenger mile yield inched up 2% to 21.58 cents. On an adjusted basis, total revenue per available seat mile inched down 0.1% to 20.02 cents.Total operating expenses, including special items, increased 5% to $14.5 billion. Salaries and related costs rose 11% to $4.6 billion. This increase was due to higher wages stemming from the contract with pilots that was ratified in 2023. Fuel gallons consumed jumped 2% to $1.04 billion. Average fuel price per gallon (adjusted) fell 3% to $2.28. Non-fuel unit cost (adjusted or CASM-Ex) inched up 4% to 14.27 cents.DAL exited the fourth quarter of 2025 with cash and cash equivalents of $4.3 billion compared with $3.07 billion at the end of the fourth quarter of 2024. The company had an adjusted net debt of $14.3 billion at the end of the December quarter, a reduction of $3.7 billion from the 2024-end. Adjusted operating cash flow in the December quarter was $2.2 billion, with gross capital expenditures and free cash flow of $877 million and $1.8 billion, respectively.DAL Issues Tepid Q1 EPS GuidanceDelta, currently carrying a Zacks Rank #3 (Hold), expects first-quarter 2026 adjusted earnings per share in the 50-90 cents band. The Zacks Consensus Estimate is currently pegged at 76 per share, above the mid-point of the guided range.The adjusted operating margin is expected in the 4.5-6% band. With air-travel demand stabilizing, revenues on an adjusted basis are expected to increase in the 5-7% band from the first quarter of 2025 level.DAL’s Dull FY26 Earnings GuidanceThe company expects full-year earnings in the $6.5-$7.5 per share range. The Zacks Consensus Estimate is currently pegged at $7.24 per share, above the mid-point of the guided range.The current earnings guidance implies 20% year-over-year growth for the current year. DAL expects free cash flow for 2026 to be in the $3-$4 billion band. Long-term targets are in the $3-$5 billion band.Stocks to ConsiderInvestors interested in the Transportation sector may consider LATAM Airlines Group LTM and Expeditors International of Washington EXPD.LTM presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.LTM has an expected earnings growth rate of 52.6% for the current year. The company has a solid earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and met in the remaining one, delivering an average beat of 29.84%. The Zacks Consensus Estimate for LTM’s 2025 earnings has moved 5.3% north in the past 60 days.EXPD presently carries a Zacks Rank #2 (Buy). Expeditors has an expected earnings growth rate of 3.50% 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 13.94%. The Zacks Consensus Estimate for EXPD’s 2025 earnings has moved 7.63% north in the past 60 days. Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Boeing Company (BA): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report LATAM Airlines Group S.A. (LTM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks