It has been a very brutal year for Delta Air Lines (NYSE: DAL) and airlines in general, given all macroeconomic and geopolitical forces that affect air trips.
But the traditional airline published good news on Thursday, reporting results of the second quarter better than expected and restoring its guide for the whole year after having retired in April due to the uncertainty of the panorama.
Delta generated income of $ 16.65 in the quarter, slightly below $ 16.66 in the same quarter last year. But tight income was a record of 15.51 billion dollars, an increase of approximately 1% year -on -year. This exceeded the estimates of 15.48 billion dollars.
The net income shot 63% to 2.13 billion dollars, or $ 3.27 per share, mainly for higher investments. The adjusted net income fell 10% to 1.37 billion dollars, or $ 2.10 per share. However, this exceeded the estimates of 2.05 $ per share.
The operational margin was 12.6%in the quarter of June, a 7%drop, while the adjusted operational margin was 13.2%, a 10%decrease.
Delta also did a decent job containing costs, with operating expenses that increased only 1% year -on -year to 14.5 billion dollars. Costs not related to fuel increased by 7%, while fuel costs, due to the lowest gas prices, fell 11%.
“Delta generated record income in the quarter of June 15.5 billion dollars, approximately 1% more than the previous year,” said Glen Hauenstein, president of Delta. “Throughout the quarter, demand trends stabilized at levels that are flat compared to last year and continue to see resilience in our various sources of high margin income. The team did a great job taking advantage of Delta’s structural advantages to optimize performance in this environment.”
The heavens clear
After the results of the first quarter, Delta did not issue a guide for the whole year due to the uncertainty that clouded its perspective. When Delta published the results of the first quarter, it was, as always, the first major company to report. He reported profits on April 9, just after President Donald Trump reveals his huge tariffs. The markets were falling and the economy had slowed down significantly, with a negative GDP in the first quarter.
As CEO Ed Bastian said at that time: “Given the lack of economic clarity, it is premature at this time to provide an updated perspective for the whole year.”
But things have changed for the better since then, with many of the reciprocal tariffs in pause and the economy improving. That has been good news for Delta, as shown by the results of Q2, and has improved the visibility of the company.
“We are not planning to pay any tariff for aircraft deliveries, and that is a quite solid point of view here on Delta’s side, Bastian said in the call of Q2. “That said, we are encouraged by the progress we see in the discussions in Washington.”
A great reason why the shares rose 13% on Thursday was for the perspective. He reinstated his annual guide, predicting profits of 5.25 $ to $ 6.25 per share for the entire fiscal year. That is less than the Q4 guide, but the company did not foresee the economic slowdown of the first quarter or the enormous impact of tariffs.
Delta also projects from 3 billion to 4 billion dollars in free cash flow for the whole year, which is aligned at the upper end with the previous guide.
For Q3, Delta anticipates income growth from 0% to 4%, an operational margin from 9% to 11% and profits of $ 1.75 per share per share.
“We hope that the quarter of September will be our best performance in unit costs not related to fuel of the year, with unitary costs not related to flat fuel or the decline compared to 2024. For the whole year, we continue on the way to deliver a growth of unit costs not related to fuel in the low -year -old low digits, consisting of our long -term goal.” Dan Janki said, CFO de Delta.
The actions are still cheap
Despite the gain of 13% on Thursday, Delta’s shares continue to fall around 6% so far this year. The actions are still very cheap with a 9 and a future per 8.
Analysts have established a medium target price of $ 60 per share for Delta, which would be approximately 5% higher than the current price. There were no target prices updates immediately after Thursday’s results, but they could be to come.
It seems that Thursday’s rebound was based on investors by buying at extremely low prices due to a decent profit report. And it was not only Delta, since United Airlines (Nyse: Uual) rose 15% on Thursday and American Airlines (NYSE: AAL) shot 14%.
Delta’s report created some hope for investors that trips will recover, particularly for the summer season. But after a gain of 13% today, I don’t know if there is enough fuel to boost it much higher with the still blurry macroeconomic panorama.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
