Delta Air Lines Generates Record September Quarter Revenue

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By Brian Nelson, CFA

On October 9, Delta Air Lines (DAL) reported excellent third quarter fiscal 2025 results with adjusted revenue and non-GAAP earnings per share exceeding the consensus forecast. Total operating revenue increased 6%, as passenger revenue increased 3% and cargo revenue advanced 19%. Operating income increased 21%, to $1.68 billion, in the quarter. Income before income taxes jumped 14%, while net income increased 11% in the quarter. Diluted earnings per share of $2.17 increased from $1.97 in the year-ago period.

Management had the following to say about the quarter:

Delta’s competitive advantages and differentiation have never been more evident, and thanks to the hard work of our people, we continue to elevate the customer experience and extend our industry leadership.  We delivered September quarter results at the top end of our expectations on a combination of strong execution and improving fundamentals.

Momentum is continuing into the final stretch of our Centennial year, positioning us to deliver strong December quarter earnings. Looking to 2026, Delta is well positioned to deliver top-line growth, margin expansion and earnings improvement consistent with our long-term financial framework…

…Over the last 6 weeks, sales trends have accelerated across all geographies and in every advance purchase window, positioning Delta to finish the year with momentum.  For the December quarter, we expect total revenue growth of 2 percent to 4 percent over last year’s record performance, with healthy sequential unit revenue improvement driven by continued Domestic strength and meaningful improvement in Transatlantic unit revenue.

Looking to the fourth quarter of fiscal 2025, Delta Air Lines expects total revenue to increase 2%-4%, with an operating margin of 10.5%-12%, resulting in earnings per share in the range of $1.60-$1.90. For fiscal year 2025, earnings per share is targeted at approximately $6.00, while free cash flow is expected in the range of $3.5-$4 billion. Gross leverage is anticipated to be less than 2.5x. Delta ended the quarter with $14.9 billion in debt and finance leases and $3.8 billion in cash and cash equivalents. Delta’s third quarter results speak to healthy consumer spending as a read on the economy, but we won’t be investing in any airline anytime soon.

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