Delta Reports Record Revenue But Cuts Profit Forecast, Putting United’s Next Results In Focus

Key Points:

• Delta Air Lines reported record third-quarter revenue of $20.2 billion, up 16% year-over-year, driven by strong demand and an 18% increase in premium revenue, supported by a 6% rise in premium seats.
• Despite higher revenue, Delta's adjusted pre-tax profit rose only 1% to $1.5 billion, with operating margins falling from 11.1% to 9.4%, mainly due to a 62% surge in adjusted fuel expenses to $4.1 billion.
• The airline lowered its full-year adjusted earnings forecast to $5.10-$5.60 per share from $6.50-$7.50, anticipating an additional $6 billion in fuel costs, highlighting the ongoing pressure of rising fuel and non-fuel costs.
• Delta expects about 20% revenue growth in the fourth quarter but acknowledges that higher costs continue to narrow profit margins, despite premium pricing strategies and solid passenger demand.
• United Airlines is set to report its quarterly results on October 20, with expectations of a similar pattern of strong premium demand and high fuel costs; comparisons between the two carriers will shed light on profitability and margin management amid industry challenges.