Shares of Delta Airlines (DAL) surged in pre-market trading after the airline major reported robust Q4 results and issued a strong outlook. The airline’s adjusted earnings surged by 44.5% year-over-year to $1.85 per share, topping consensus estimates of $1.76 per share.
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DAL’s Breakdown of Revenues in Q4
Furthermore, the company’s revenues increased by 9.4% to $15.6 billion in the fourth quarter. This surpassed Street estimates of $14.2 billion. The airline’s strong performance got a boost in the fourth quarter by its successful partnership with American Express (AXP), which generated $2 billion in revenue during the fourth quarter, a 14% increase year-over-year.
Additionally, Delta’s premium seat offerings, such as first-class and premium economy, saw an 8% rise in revenue, reaching $5.2 billion. This growth significantly outperformed the 2% increase in main cabin ticket revenue, which amounted to around $6 billion.
DAL’s CEO Comments on the Results
Ed Bastian, Delta’s CEO, stated, “As we move into 2025, we expect strong demand for travel to continue, with consumers increasingly seeking the premium products and experiences that Delta provides. Our differentiated strategy and best-in-class operations, combined with demand strength and an increasingly constructive industry backdrop, position us to deliver the best financial year in Delta’s 100-year history.”
DAL Issues Upbeat Guidance
Looking ahead, the company expects adjusted earnings to grow by more than 10% year-over-year in FY25, exceeding $7.35 per share. Additionally, free cash flows are projected to surpass $4 billion, an 18% increase year-over-year. For context, analysts had expected the company to report earnings of $7.45 per share.
In the first quarter, Delta estimates its revenues will grow by 7% to 9% year-over-year, while earnings are projected to range between $0.70 and $1.00 per share. For comparison, analysts had anticipated Q1 earnings of $0.76 per share.
Is DAL Stock a Buy?
Analysts remain bullish about DAL stock, with a Strong Buy consensus rating based on a unanimous 17 Buys. Over the past year, DAL has surged by more than 40%, and the average DAL price target of $78.96 implies an upside potential of 28.6% from current levels. These analyst ratings are likely to change following DAL’s results today.
