Delta Air Lines, Inc.
DAL · NYSE
Next quarter
Reports Oct 8, 2026.
Consensus is $2.03 EPS for Sep 2026 across 6 estimates, ranging $1.66 to $2.39.
DAL Jun 2026
- 3.31%
- -1.37%
- $1.51
- $1.56
- —
- $19.76B
Reported results
- $19.76B
- $1.86B
- 9.43%
- $1.60B
- $2.44
Highlights
- Adjusted earnings: Adjusted EPS was $1.56, ahead of the $1.51 consensus by 3.3%, but down from $2.12 a year ago; GAAP EPS was $2.44 versus $3.27 a year ago.
- Revenue momentum: Adjusted operating revenue rose 13.9% year over year to $17.7 billion on approximately 1% capacity growth, with adjusted TRASM up 12.4% to 22.45 cents.
- Demand mix: Premium revenue increased 17%, loyalty and related revenue rose 19%, American Express remuneration grew 16% to $2.4 billion, and diverse, higher-margin revenue reached 61% of adjusted revenue.
- Fuel headwind: Adjusted fuel expense increased 77% to $4.4 billion, with adjusted fuel cost per gallon up 75% to $3.93; non-fuel CASM-Ex also rose 6.8% to 14.09 cents.
- Profit compression: Adjusted operating income fell 24% to $1.56 billion and adjusted operating margin declined to 8.8% from 13.3% a year ago, despite strong revenue growth.
- Refinery contribution: The refinery segment generated $351 million of operating income versus a $10 million loss a year ago, although a temporary outage began in mid-June.
- Balance sheet and returns: Adjusted net debt fell $709 million from year-end to $13.6 billion, while Delta announced a 15% dividend increase beginning with the September-quarter payment.
- Outlook affirmed: Delta maintained full-year adjusted EPS guidance of $6.50-$7.50 and free cash flow guidance of $3-$4 billion; September-quarter revenue is expected to grow in the mid-teens with an 11%-13% operating margin.
Analysis
Delta's June quarter was a demand and pricing success that still produced lower profitability because of an unusually large fuel shock and higher operating costs. Adjusted EPS of $1.56 exceeded the $1.51 consensus, while adjusted revenue rose 13.9% year over year to $17.7 billion. Adjusted operating income declined 24% to $1.56 billion and margin fell 4.5 points to 8.8%, as adjusted fuel expense jumped 77% to $4.4 billion and non-fuel unit costs increased 6.8%. GAAP results were $19.8 billion of revenue, $1.9 billion of operating income and $2.44 of EPS, compared with $16.6 billion, $2.1 billion and $3.27 in the year-ago quarter.
The quarter also marked a sharp sequential recovery from the March quarter's $15.85 billion of revenue, $501 million of operating income and $0.44 GAAP loss, although the comparison is affected by seasonality and non-GAAP adjustments. Delta emphasized broad-based demand, with premium revenue up 17%, loyalty revenue up 19% and American Express remuneration reaching $2.4 billion. Cash generation remained positive but weakened: adjusted free cash flow was $209 million versus $733 million a year ago. Management nevertheless affirmed full-year guidance and expects September-quarter revenue growth in the mid-teens, a margin of 11%-13% and adjusted EPS of $2.00-$2.50.
Demand and revenue mix
Delta's core commercial performance was the defining strength of the quarter. Adjusted revenue increased 13.9% to $17.7 billion on roughly 1% capacity growth, implying that pricing and mix, rather than added flying, drove the result. Adjusted TRASM rose 12.4% to 22.45 cents.
- Passenger demand: Passenger revenue rose 13% to $15.6 billion. Domestic revenue increased 15% to $10.7 billion on 2% capacity growth, while international revenue rose 8%, led by the Atlantic and Pacific regions.
- Premium and loyalty: Premium revenue grew 17% to $6.9 billion, versus 8% growth in main-cabin ticket revenue. Loyalty and related revenue increased 19% to $1.3 billion, supported by higher American Express card spend and new card acquisitions.
- Diversification: Premium products and other higher-margin revenue streams represented 61% of adjusted revenue, up from 59% a year ago. MRO revenue rose 32% to $315 million and cargo revenue increased 39% to $294 million.
- Corporate travel: Corporate sales grew double digits across all sectors, while premium corporate sales increased more than 25%, reflecting demand for Delta Comfort and Delta Premium Select.
Fuel and operating costs
Revenue strength was not enough to offset the cost environment. Delta described fuel expense as the highest in its history, with elevated prices also feeding through to fares. The company expects fuel costs to remain elevated until recent market disruptions and geopolitical events ease.
- Fuel: Adjusted fuel expense rose 77% to $4.4 billion, while adjusted fuel cost increased 75% to $3.93 per gallon. Consumption rose only 1%, consistent with the 1% increase in capacity.
- Unit costs: Adjusted non-fuel cost increased 8% to $11.1 billion, and CASM-Ex rose 6.8% to 14.09 cents. Management expects modest improvement in September and a return toward low-single-digit non-fuel unit-cost growth as capacity normalizes.
- Margins: Adjusted operating income declined to $1.56 billion from $2.06 billion, reducing adjusted operating margin to 8.8% from 13.3%. GAAP operating income was $1.86 billion, down 11% from $2.10 billion.
- Refinery: Higher refined-product pricing and margins lifted refinery operating income to $351 million from a $10 million loss. A temporary outage beginning in mid-June partially offset the benefit.
Cash flow and balance sheet
Delta continued to prioritize debt reduction and shareholder returns, but heavy fleet investment and weaker operating cash flow limited quarterly free cash flow. The company paid down debt while extending portions of its financing structure.
- Cash generation: Adjusted operating cash flow was $1.7 billion, down from $1.8 billion a year ago. Gross capital expenditures were $1.4 billion, producing adjusted free cash flow of $209 million versus $733 million in the prior-year quarter.
- Debt reduction: Delta made $536 million of debt and finance-lease payments during the quarter and $2.1 billion in the first half. Adjusted net debt ended June at $13.6 billion, down $709 million from December 2025 and $2.7 billion from June 2025.
- Liquidity: Liquidity was $7.7 billion, including $3.1 billion of undrawn revolving capacity. Management expects gross leverage of approximately 2x by year-end.
- Shareholder returns: The quarterly dividend paid in June was $0.1875 per share. The board approved a $0.2150 dividend for the next payment, representing a 15% increase.
Outlook and guidance
Management carried the quarter's demand momentum into the second-half outlook and did not change its full-year targets, despite the fuel headwind. The near-term setup assumes modest capacity growth, improving unit revenue and some cost relief as capacity growth normalizes.
- September quarter: Revenue is expected to increase in the mid-teens year over year, with an operating margin of 11%-13% and adjusted EPS of $2.00-$2.50.
- Full year: Adjusted EPS guidance remains $6.50-$7.50 and free cash flow guidance remains $3-$4 billion. Delta also continues to target gross leverage of approximately 2x by year-end.
- Fuel assumption: September guidance uses the July 2 forward fuel curve, including a 5-cent-per-gallon refinery benefit, for an all-in fuel price of approximately $3.15 per gallon.
