Delta Air Lines, Inc. (DAL) Earnings & Analysis

Latest quarter

Delta reported Q3 FY2026 revenue of $20.2 billion, compared with $16.7 billion in Q3 FY2025, a 21.1% increase. Adjusted EPS, as the consensus counts it, was $1.72 for the quarter to September 30, 2026, below the consensus adjusted EPS of $1.80 by −4.44%. Revenue, as the consensus counts it, was $17.6 billion, below the consensus revenue of $17.7 billion by −0.89%.

The filing attributes the revenue increase to demand across premium, main-cabin and loyalty offerings, higher third-party refinery sales, and growth in cargo and MRO. The filing says passenger revenue rose $2.0 billion from a year earlier, while cargo revenue increased 29%, largely on volume. Delta’s diluted EPS was $1.15, compared with $2.17 a year earlier, a −47.0% change. Gross margin was 21.8%, versus 35.4%, and operating margin was 7.20%, versus 10.1%. Delta reported free cash flow of $300.0 million, compared with $688.0 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On the earnings call, Chief Executive Officer Edward H. Bastian said demand remained strong across leisure and business travel and across cabins, while premium growth remained high and main-cabin trends continued to improve. Bastian said the company’s approach to growth and wider industry capacity actions were helping the industry recover higher fuel costs. He said the company expected December-quarter revenue momentum to continue and nonfuel cost performance to improve.

Chief Commercial Officer Joe Esposito said Delta was more than 60% booked for the fourth quarter and described premium demand as being in the high teens. Esposito told analysts that higher fares, customer engagement and spending through SkyMiles, American Express and other partnerships supported the company’s revenue outlook. Asked about the competitive setting, he said competitive capacity was down in Delta’s hubs and that the company was not seeing effects from capacity in other carriers’ hubs across the domestic network.

Bastian said fuel prices would remain an important consideration for capacity decisions, and he said Delta would be adaptive while monitoring consumer health, the economy and international markets. He said the company expected more of its future growth to be international than domestic, while remaining cautious until it saw clearer conditions on fuel.

Chief Financial Officer Erik Storey Snell said the September-quarter fuel price averaged $3.61 per gallon, including a refinery benefit, and that the refinery was fully online following its temporary outage. Snell said fourth-quarter fuel was projected at $4.25 per gallon, including an expected refinery benefit of approximately $0.40 per gallon. He said nonfuel unit-cost growth was expected to improve sequentially as capacity rose slightly and operational efficiencies continued.

Chief Operating Officer Daniel Charles Janki said Delta was investing in process, technology, data and resources to improve crew resiliency during disruptions. Janki said the company had seen operational improvement from the first quarter through the third quarter and anticipated that trend continuing into the fourth quarter and next year.

Guidance

Delta’s current outlook calls for Q4 FY2026 non-GAAP EPS of $1.15 to $1.65, revenue growth of 20.0%, and a non-GAAP operating margin of 7.00% to 9.00%. For FY2026, Delta expects non-GAAP EPS of $5.10 to $5.60, American Express remuneration of $9.0 billion, and non-GAAP debt of 2.2×. The company also expects low-single-digit unit-cost growth in FY2027.