Shares of Delta Air Lines (DAL) surged 3.3% in pre-market trading after the airline company reported robust Q1 results and showed resilience in a challenging economic environment. DAL’s adjusted earnings per share (EPS) of $0.46 climbed 2.2% and exceeded analysts’ expectations of $0.39. Also, operating revenue rose 2.1% to $14.04 billion and came slightly above forecasts of $13.89 billion.
Despite these positive results, Delta’s CEO Ed Bastian said that growth was stalled due to economic uncertainty and global trade challenges. In response, the airline plans to save costs and reduce capacity growth in the second half of the year to better align supply with demand and protect margins.
DAL’s Q1 Revenue Breakdown
Delta’s focus on premium and loyalty continued to drive its revenues. Premium revenue outpaced the main cabin, up 7% year-over-year in the March quarter. Also, American Express (AXP) partnership helped generate $2 billion during the quarter, up 13% from the previous year.
Region-wise, international revenue saw solid growth, rising mid-single digits year-over-year. Pacific revenue surged by 16% on double-digit capacity growth. Further, Transatlantic and Latin America revenue rose by 5% each compared to last year.
DAL Fails to Reaffirm 2025 Outlook
Delta Air Lines has decided not to reaffirm its full-year 2025 guidance due to current uncertainty in the economic and trade environment.
However, the company has provided an outlook for the second quarter of 2025. It expects Q2 EPS of $1.70 to $2.30, which compares unfavorably with the consensus of $2.21.
Also, Delta projects second-quarter total revenue growth of down 2% to up 2%, while the analysts forecast a 0.5% year-over-year decline. The company sees continued resilience in premium, loyalty, and international business, partially offset by domestic and main cabin softness.
Moreover, DAL expects non-fuel unit cost growth to be consistent with its long-term target, rising by low single digits during Q2.
Is DAL a Good Stock to Buy Right Now?
Turning to Wall Street, DAL stock has a Strong Buy consensus rating based on 12 Buys and three Holds assigned in the last three months. At $62.71, the average Delta Air Lines stock price target implies a 74.78% upside potential.
