Associated Press Business Writer Michelle Chapman
Delta said on Wednesday that it was on track for the best fiscal year in the company’s history in January, but that the turmoil in global trade caused so much uncertainty that it stirred up expectations for a 2025 performance.
This is an amazing walkback for the country’s most profitable airlines, and other companies are following along. Hours after Delta removed guidance for the year, Walmart reduced the first quarter operating profit guidance it provided to investors, citing tariff risks.
Delta is cutting flight schedules in anticipation of slower spending as businesses and households support it at higher prices.
“Growth is largely at a dead end due to widespread economic uncertainty regarding global trade,” CEO Ed Bastian said in a statement Wednesday. “In this slow growth environment, we are protecting margins and cash flows by focusing on what we can control, including reducing planned capacity growth later in the year.”
In the first quarter, Delta won $240 million, or 37 cents per share. A year ago, when profits fell from a new contract with the pilot, it earned $37 million, or 6 cents per share.
Once the costs and benefits were removed, the revenue was 46 cents per share. This is better than the 40 cents per share analyst voted by Zacks Investment Research, predicted by Zacks Investment Research.
Shares in Delta Air Lines Inc. rose more than 8%. Citi analysts have suggested that Delta could be the perfect airline to survive uncertainty in the coming months for investors who want to maintain exposure to the travel sector.
“Overall, these results demonstrate a career with a resilient business model in light of significant uncertainty regarding demand and global tariff disputes,” Citi Investment Research’s Stephen Trent wrote to his client in a note.
Still, the sector is hoping investors will anticipate trouble from rising tariffs this year and spend money elsewhere. Stocks fell 41% this year for the country’s most profitable airlines. This is better than its American and United rivals.
Quarterly operating revenue rose from $13.75 billion to $14.04 billion, breaking Wall Street’s estimate of $138.1 billion.
The average fuel price per gallon fell from $2.79 to $2.47.
Delta cut its first quarter revenue and revenue outlook last month, saying at the time, a recent decline in consumer and business trust was weakening domestic demand amid growing uncertainty about the economy.
Delta said in March it expects first quarter revenue to rise between 3% and 4% compared to a decline from its 7% and 9% forecast.
In January, Delta released its fourth quarter results, surpassing Wall Street’s earnings and revenue estimates.
However, conditions have since deteriorated, and the rapidly growing trade war has made consumers and businesses unsure what will happen next. Both are beginning to draw back spending, including travel.
Bastian said Delta expects profitability between $1.5 billion and $2 billion for the June quarter, but will not update its annual outlook “given the lack of economic clarity.”
The airline previously said it expects 2025 profits of more than $7.35 per share and free cash flow of more than $4 billion. At the time, the company was hoping to continue strong travel demand, but that is clearly changing.
A month ago, Bastian was confident enough to stick to Delta’s guidance that year. Speaking at the JPMorgan Industrial Conference, the executive said at the time that he felt good about where the Delta was.
“I’ve never spent the last few months showing that there’s a crack in either of these,” he said. “We expect margins to continue to grow and we believe that even if we start late this year, we will expand this year.”
But uncertainty about US trade policy has rattled businesses in all economic sectors ever since.
Bastian said in a Delta revenue call on Wednesday that the airline is looking at the softness of domestic consumers and business trips, taking into account all the uncertainty. So far, there has been greater resilience in the international market, he added.
Bastian argued that Delta is “suitable to provide solid profitability and meaningful cash flow in 2025,” given the current fuel prices and action.
For the second quarter, airlines were looking for revenues of between $1.70 and $2.30 per share, with total revenues rising 2%, down 2%. Analysts surveyed by Factset predicted earnings of $2.21 per share.
“We’re playing in 2025 in a different way than what was expected earlier this year,” Delta President Glenn Hauenstein said. “As a result, we are still loyal to our long-term strategy while still adapting to current conditions.”
Original issue: April 9, 2025 9:24am EDT
