Delta Air Lines, Inc.
DAL · NYSE
Next quarter
Expected to report Jan 12, 2027 — estimated from last year’s reporting date.
Consensus is $1.42 EPS for Dec 2026 across 7 estimates, ranging $1.16 to $1.56.
DAL Sep 2026
- 4.44%
- $1.80
- $1.72
- —
- $20.19B
Reported results
- $20.19B
- $1.45B
- 7.20%
- $756.00M
- $1.15
Highlights
- Adjusted earnings: Diluted EPS of $1.72 missed the $1.80 consensus by 4.4%, but edged up from $1.70 a year earlier; GAAP EPS was $1.15 versus $2.17.
- Demand and revenue: Adjusted airline revenue reached a September-quarter record of $17.6 billion, up 16% year over year on flat capacity; adjusted unit revenue grew 15%.
- Fuel pressure: Adjusted fuel expense rose 62% to $4.1 billion, with fuel at $3.61 per gallon, while non-fuel unit costs increased 7.3% on flat capacity.
- Profitability: Adjusted operating income was $1.66 billion, down 2%, and adjusted operating margin was 9.4%, versus 11.1% a year earlier; adjusted pretax income was $1.50 billion, up 1%.
- Broader revenue mix: Premium and other diverse revenue streams represented 61% of adjusted revenue; premium and loyalty revenue each grew 18%, while cargo and MRO rose 29% and 28%.
- December-quarter outlook: Delta expects revenue growth of about 20% year over year, adjusted EPS of $1.15–$1.65 and an operating margin of 7%–9%; planned capacity growth is about 3%, with seat growth below 2%.
- Cash and debt: September-quarter free cash flow was $463 million, down from $833 million a year ago; year-to-date free cash flow was $1.9 billion and adjusted net debt fell $950 million from year-end 2025 to $13.4 billion.
- Full-year targets: Delta expects adjusted EPS of $5.10–$5.60 and free cash flow of about $2.5 billion, and plans to repay more than $2 billion of debt while absorbing an estimated $6 billion increase in fuel costs.
Analysis
Delta’s September quarter combined record underlying airline revenue with a sharper fuel-cost burden and an adjusted EPS result below expectations. Adjusted diluted EPS of $1.72 was 4.4% below the $1.80 consensus, although it was slightly above $1.70 a year earlier. Adjusted airline revenue rose 16% to $17.6 billion on flat capacity, and adjusted pretax income of $1.50 billion was broadly level with last year. Fuel costs were the central offset: adjusted fuel expense increased 62% to $4.1 billion, and the adjusted operating margin contracted to 9.4% from 11.1%.
On a GAAP basis, revenue of $20.19 billion was up 21% year over year, partly reflecting higher third-party refinery sales, while operating income fell 14% to $1.45 billion and diluted EPS was $1.15. Versus Q2 FY2026, GAAP revenue increased about 2%, but operating income declined from $1.86 billion and EPS from $2.44, consistent with the usual seasonal comparison and this quarter’s cost pressure. The print’s defining positives were yield-led demand and growth in premium, loyalty and other revenue streams; its main constraint was fuel, compounded by 7.3% growth in non-fuel unit costs. Delta expects momentum to continue, guiding to roughly 20% December-quarter revenue growth and reaffirming full-year adjusted EPS of $5.10–$5.60.
Revenue and demand
- Underlying growth: Adjusted revenue, which excludes third-party refinery sales, increased 16% to $17.6 billion on flat available seat miles; adjusted TRASM rose 15% to 22.18 cents, accelerating three percentage points from the prior quarter’s year-over-year growth rate.
- Yield strength: Main-cabin unit revenue rose 17% with main-cabin seats down low single digits. Domestic unit revenue grew 16%; international unit revenue rose 12%, led by Latin America at 22%, while transatlantic unit revenue growth improved to 11%.
- Forward demand: Corporate sales grew double digits across sectors, and forward cash sales increased nearly 20% during the quarter. Delta said the December quarter was more than 60% booked and expects unit-revenue progression with seats growing less than 2%.
Fuel and margins
- Fuel shock: Adjusted fuel expense climbed 62% to $4.14 billion, with the average adjusted price per gallon up 60% to $3.61. Management said the quarter absorbed more than $500 million of fuel costs above its early-July guidance.
- Underlying costs: Non-fuel CASM rose 7.3% to 14.03 cents despite flat capacity. Delta attributed the increase mainly to crew and revenue-related costs, capacity growth below its original plan, and nearly one percentage point of disruption impact from summer storms.
- Earnings quality: Adjusted operating income was $1.66 billion versus $1.69 billion a year earlier, with margin down to 9.4% from 11.1%. Adjusted pretax income was $1.50 billion, slightly above $1.48 billion last year; GAAP pretax income was lower at $1.07 billion, including investment and hedge-related items.
Premium and loyalty
- Premium mix: Premium ticket revenue increased 18% to $6.82 billion; premium seats grew 6% while load factor improved by nearly two points, according to management.
- Loyalty ecosystem: Loyalty travel-award revenue rose 18% and loyalty-and-related revenue increased 19%. American Express remuneration grew 15% in the quarter; Delta expects full-year remuneration to exceed $9 billion.
- Diversified businesses: Premium products and other diverse streams accounted for 61% of adjusted revenue. Cargo revenue rose 29% to $301 million and MRO revenue grew 28% to $296 million; MRO revenue reached $990 million year to date, up 59%.
Cash and balance sheet
- Cash generation: Adjusted operating cash flow was $1.72 billion, compared with $1.82 billion a year ago. Free cash flow was $463 million versus $833 million, reflecting $1.41 billion of gross capital expenditures.
- Debt reduction: Adjusted net debt ended the quarter at $13.35 billion, down $950 million from December 2025. Delta made $1.23 billion of debt and finance-lease payments during the quarter.
- Liquidity: Quarter-end liquidity was $6.9 billion, including $3.1 billion of undrawn revolving credit capacity. The air traffic liability was $9.6 billion.
December-quarter outlook
- Revenue and earnings: Delta forecasts total revenue growth of approximately 20% year over year, adjusted EPS of $1.15–$1.65 and an operating margin of 7%–9%. Management expects continued sequential improvement in unit revenue.
- Capacity and costs: Planned capacity growth is about 3%, while seat growth is below 2%, including fewer Main Cabin seats. The company expects non-fuel unit-cost growth to improve by one to two percentage points sequentially and projects all-in fuel of about $4.25 per gallon, including a refinery benefit of roughly $0.40.
- Full-year plan: Delta expects adjusted EPS of $5.10–$5.60, free cash flow of approximately $2.5 billion and gross leverage of about 2.2x, with more than $2 billion of debt repayment. It expects roughly $4.5 billion of pretax profit while absorbing an estimated $6 billion increase in fuel costs.
