Core Viewpoint - The US stock market continues to rise, with the S&P 500 and Nasdaq indices reaching new closing highs, driven by positive earnings forecasts from Delta Air Lines and Nvidia's market cap milestone [1][3]. Market Performance - The Dow Jones Industrial Average rose by 192.34 points to 44,650.64, an increase of 0.43%; the S&P 500 increased by 0.27% to 6,280.46; and the Nasdaq slightly rose by 0.09% to 20,630.66, marking the eighth new closing high for the S&P 500 this year [1]. - Among the 11 major sectors of the S&P 500, nine sectors saw gains, while communication services and technology sectors experienced slight declines of 0.5% and 0.1%, respectively [2]. Company Highlights - Nvidia's stock rose by 0.7%, with its market cap surpassing $4 trillion for the first time [3]. - Tesla's stock surged by 4.7% as the company announced its annual shareholder meeting for November [3]. - Delta Air Lines' stock jumped by 12% after reporting Q2 earnings of $2.10 per share, exceeding analyst expectations of $2.06, and revenue of $15.51 billion, slightly above market forecasts [6][7]. - The airline sector performed strongly, with United Airlines and American Airlines rising by 14.3% and 12.7%, respectively [8]. - Chinese concept stocks showed mixed results, with the Nasdaq Golden Dragon China Index rising by 0.90%. Alibaba increased by over 2%, while Netease fell by over 2% [5]. Economic Indicators - Initial jobless claims in the US fell to 227,000, the lowest in seven weeks, better than the expected 235,000, indicating a strong labor market [9]. - Financial analysts noted that Delta's optimistic guidance and the favorable jobless claims data boosted market risk appetite [9]. - Recent uncertainties have eased, with significant legislative progress and clearer tariff issues contributing to market stability [9]. Commodity Market - International oil prices declined, with WTI crude oil futures dropping by 2.65% to $66.57 per barrel, and Brent crude oil futures falling by 2.21% to $68.64 [10].

Core Viewpoint - Delta Air Lines reported better-than-expected second-quarter earnings, leading to a 12% surge in its stock and boosting investor confidence across the airline sector [1][5]. Financial Performance - Delta's adjusted earnings were $2.10 per share, exceeding expectations of $2.05 [1]. - Passenger revenue increased by 26% to $13.88 billion, while total operating revenue for the quarter reached $16.65 billion, surpassing the consensus estimate of $16.18 billion [2]. Market Sentiment - The positive earnings report resulted in a rally for other airline stocks, with United Airlines shares rising by 14.3% and American Airlines increasing by 12.7% [6]. - CEO Ed Bastian indicated that Delta's premium and loyalty segments are showing resilience, which is helping to mitigate some softness in the main cabin [3]. Future Outlook - Bastian expressed optimism about improving consumer and corporate confidence in the second half of the year, which is expected to drive travel demand [5]. - The CEO also mentioned that the anticipated passage of Trump's tax and spending bill and progress in trade negotiations could restore economic certainty [4].

[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's financial statements, management's discussion and analysis, and disclosures on market risk and controls [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Delta's unaudited condensed consolidated financial statements, detailing financial position and performance for Q2 and H1 2025 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of Delta's financial position, detailing assets, liabilities, and equity as of June 30, 2025 Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$78,395** | **$75,372** | | Total current assets | $10,982 | $9,844 | | Property and equipment, net | $38,926 | $37,595 | | **Total Liabilities** | **$60,955** | **$60,079** | | Air traffic liability | $8,893 | $7,094 | | Total debt and finance leases | $15,056 | $16,194 | | **Total Stockholders' Equity** | **$17,440** | **$15,293** | [Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section details Delta's financial performance, including revenues, expenses, and net income for Q2 and H1 2025 Q2 2025 vs Q2 2024 Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total operating revenue | $16,648 | $16,658 | | Total operating expense | $14,546 | $14,391 | | **Operating Income** | **$2,102** | **$2,267** | | **Net Income** | **$2,130** | **$1,305** | | Diluted Earnings Per Share | $3.27 | $2.01 | H1 2025 vs H1 2024 Performance (in millions, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total operating revenue | $30,688 | $30,406 | | Total operating expense | $28,017 | $27,525 | | **Operating Income** | **$2,671** | **$2,881** | | **Net Income** | **$2,370** | **$1,342** | | Diluted Earnings Per Share | $3.63 | $2.08 | [Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines Delta's cash inflows and outflows from operating, investing, and financing activities for H1 2025 Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,235 | $4,857 | | Net cash used in investing activities | ($2,423) | ($1,446) | | Net cash used in financing activities | ($1,704) | ($2,299) | | **Net Increase in Cash** | **$108** | **$1,112** | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, significant transactions, and segment performance - Total cash sales from marketing agreements related to the loyalty program were **$4.0 billion** for the six months ended June 30, 2025, up from **$3.6 billion** in the same period of 2024[38](index=38&type=chunk) - Total debt decreased from **$15.3 billion** at the end of 2024 to **$14.4 billion** as of June 30, 2025. In June 2025, the company issued **$2.0 billion** in new unsecured notes to repay a higher-cost PSP loan and for general corporate purposes[52](index=52&type=chunk)[53](index=53&type=chunk) - As of June 30, 2025, the company had future aircraft purchase commitments of approximately **$16.8 billion** for **275 aircraft**, with deliveries scheduled through 2029 and beyond[62](index=62&type=chunk)[65](index=65&type=chunk) - The refinery segment reported an operating loss of **$10 million** for the six months ended June 30, 2025, a decrease from the **$108 million** operating income in the same period of 2024[73](index=73&type=chunk) [Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Delta's financial performance, condition, and liquidity, highlighting key drivers and strategic initiatives for Q2 and H1 2025 [Q2 2025 Financial Highlights](index=19&type=section&id=June%202025%20Quarter%20Financial%20Highlights) This section summarizes Delta's key financial performance metrics for the second quarter of 2025, including income, revenue, expenses, and liquidity - Operating income for Q2 2025 was **$2.1 billion**, a decrease of **$165 million** compared to Q2 2024[79](index=79&type=chunk) - Total revenue was flat, with an increase in premium product and loyalty revenue offset by a decline in main cabin demand due to macroeconomic uncertainty[80](index=80&type=chunk) - Total operating expense increased by **1%** (**$155 million**) YoY, driven by higher wages and landing fees, but partially offset by lower fuel costs. Non-fuel unit cost (CASM-Ex) increased **2.7%**[81](index=81&type=chunk)[82](index=82&type=chunk) - Total liquidity stood at **$6.4 billion** as of June 30, 2025. The company generated **$733 million** in free cash flow during the quarter[82](index=82&type=chunk)[84](index=84&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) This section analyzes Delta's operating revenue and expense trends for Q2 and H1 2025, highlighting key drivers by product, region, and cost category Q2 2025 vs Q2 2024 Passenger Revenue by Product (in millions) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Ticket - Main cabin | $6,347 | $6,716 | (5)% | | Ticket - Premium products | $5,899 | $5,633 | 5% | | Loyalty travel awards | $1,092 | $975 | 12% | Q2 2025 vs Q2 2024 Passenger Revenue Change by Region | Region | Revenue Change | Capacity (ASM) Change | | :--- | :--- | :--- | | Domestic | (1)% | 4% | | Atlantic | 2% | 4% | | Latin America | (1)% | (1)% | | Pacific | 11% | 11% | Q2 2025 vs Q2 2024 Key Operating Expenses (in millions) | Expense Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Salaries and related costs | $4,402 | $4,012 | 10% | | Aircraft fuel and related taxes | $2,458 | $2,813 | (13)% | | Landing fees and other rents | $878 | $766 | 15% | [Financial Condition and Liquidity](index=28&type=section&id=Financial%20Condition%20and%20Liquidity) This section details Delta's financial position, liquidity, cash flow generation, debt management, and capital allocation strategies as of June 30, 2025 - Total liquidity as of June 30, 2025 was **$6.4 billion**, which includes cash, cash equivalents, short-term investments, and **$3.1 billion** available under revolving credit facilities[123](index=123&type=chunk)[124](index=124&type=chunk) - In H1 2025, net cash from operations was **$4.2 billion**. Capital expenditures were **$2.4 billion**, with a full-year forecast of approximately **$5.0 billion**[125](index=125&type=chunk)[132](index=132&type=chunk) - The company repaid **$3.5 billion** of debt and finance lease obligations in H1 2025. In June 2025, it issued **$2.0 billion** in new, lower-rate unsecured notes to repay a PSP loan[133](index=133&type=chunk)[134](index=134&type=chunk) - The Board of Directors increased the quarterly dividend to **$0.1875 per share** and authorized a new **$1.0 billion** share repurchase program, open through June 2028[137](index=137&type=chunk) [Fleet Information](index=27&type=section&id=Fleet%20Information) This section provides an overview of Delta's mainline and regional aircraft fleet, including current count, average age, and future purchase commitments Mainline Fleet Summary as of June 30, 2025 | Category | Count | | :--- | :--- | | Total Mainline Aircraft | 980 | | Average Fleet Age (Years) | 14.8 | | Aircraft Purchase Commitments | 275 | | Aircraft Purchase Options | 120 | - The company has **275 mainline aircraft** on order, including **100 B-737-10**, **79 A321-200neo**, and **67 A220-300 aircraft**[65](index=65&type=chunk)[121](index=121&type=chunk) - In addition to the mainline fleet, regional carriers operate **322 aircraft** on behalf of Delta[122](index=122&type=chunk) [Market Risk Disclosures](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes in its market risk exposures from the information provided in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in market risk from the disclosures in the 2024 Form 10-K[149](index=149&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. No material changes were made to the internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[150](index=150&type=chunk) - No material changes were made to internal controls over financial reporting during the second quarter of 2025[151](index=151&type=chunk) [Part II. Other Information](index=33&type=section&id=Part%20II.%20Other%20Information) This section provides updates on legal proceedings, risk factors, and equity-related activities not covered in the financial statements [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes from the legal proceedings that were described in its 2024 Annual Report on Form 10-K - There have been no material changes from the legal proceedings described in the 2024 Form 10-K[152](index=152&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes from the risk factors described in the 2024 Form 10-K[153](index=153&type=chunk) [Share Repurchases and Equity Sales](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the authorization of a new share repurchase program and other equity-related activities during the second quarter of 2025 - In the June 2025 quarter, the Board of Directors authorized a **$1.0 billion** opportunistic share repurchase program, valid through June 30, 2028[155](index=155&type=chunk) - No shares were repurchased under the new program in the June 2025 quarter[155](index=155&type=chunk)

Core Insights - Delta Air Lines reported strong Q2 results, exceeding EPS expectations and announcing a dividend increase, positively impacting investor sentiment [1][2][4] Financial Performance - Delta's Q2 EPS was $2.10, surpassing expectations of $2.04 by nearly 3%, although it declined from $2.36 in the previous year [2] - Q2 operating revenue reached $16.64 billion, exceeding estimates by approximately 3% but slightly down from $16.65 billion a year ago [2] - The company achieved an operating margin of 12.6% during Q2 [12] Revenue Streams - Revenue from premium cabin sales increased by 5%, while loyalty program revenue surged by 8% [3] - Delta received $2 billion from its partnership with American Express, which serves as the exclusive credit card issuer for Delta SkyMiles [3] Dividend Announcement - Delta increased its quarterly dividend by over 25%, raising it from $0.15 to approximately $0.19 per share, with the first payment scheduled for August 21 [4] Guidance and Market Position - Delta reaffirmed its full-year guidance for fiscal 2025 EPS at $5.25-$6.25, above the Zacks Consensus of $5.11, and free cash flow expectations of $3-$4 billion [7] - Despite a 7% decline year-to-date, Delta's stock has increased by 95% over the last three years, outperforming American Airlines [8][9] Valuation Metrics - Delta's stock trades at a forward earnings multiple of 9.9X, significantly below the benchmark's 24.2X and the industry average of 13.9X [10] - The stock also trades at 0.5X forward sales, in line with the industry average, compared to the S&P 500's 5.4X [10]

Core Insights - Delta Air Lines reported quarterly earnings of $2.1 per share, exceeding the Zacks Consensus Estimate of $2.04 per share, but down from $2.36 per share a year ago, indicating an earnings surprise of +2.94% [1] - The company generated revenues of $16.65 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.78%, although this is slightly lower than the $16.66 billion reported in the same quarter last year [2] - Delta shares have declined approximately 16.2% year-to-date, contrasting with the S&P 500's increase of 6.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.36 on revenues of $15.46 billion, while for the current fiscal year, the estimate is $5.11 on revenues of $59.49 billion [7] - The estimate revisions trend for Delta was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Transportation - Airline industry is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stocks within this sector [8] - Air Canada, another airline in the same industry, is expected to report quarterly earnings of $0.51 per share, reflecting a year-over-year decline of -29.2%, with revenues anticipated to be $3.99 billion, down 1.1% from the previous year [9]

Group 1: Delta Air Lines Inc - Delta Air Lines Inc's stock increased by 12.4%, trading at $56.99, following a top-line beat for Q2 [1] - CEO Ed Bastian indicated that bookings have stabilized after a period of lower demand in spring, and the profit outlook for 2025 has been reinstated [1] - The positive report has had a significant impact on the airline sector as a whole [1] Group 2: American Airlines Group Inc - American Airlines Group Inc's stock rose by 14%, trading at $13.13, reaching its highest level since early March [2] - Despite being down 25% year-to-date, the stock is now 51% above its multi-year low of $8.50 recorded on April 4 [2] - The 200-day moving average is currently acting as a resistance level for the stock's rally [2] Group 3: Options Activity - American Airlines Group Inc saw a surge in call options trading, with 286,000 contracts changing hands, four times the average intraday volume [3] - The most popular call option was the weekly 7/11 12.50-strike call, along with the July 13 call in the standard expiration series [3] Group 4: United Airlines Holdings Inc - United Airlines Holdings Inc's stock increased by 14.2%, trading at $91.57, approaching its highest close since March 4 [5] - The stock is only down 6.5% in 2025 but has risen 92.4% year-over-year, with today's trading surpassing the 160-day moving average [5] - There were 78,000 UAL calls traded, quadrupling the average intraday volume, with the weekly 7/11 87-strike call being the most popular [5] Group 5: Airline Sector Trends - Airline stocks, including Delta, American, and United, are showing a pattern of movement together, indicating a sector-wide trend [6] - These companies have high Schaeffer's Volatility Scorecard readings of 99, 93, and 96 out of 100, suggesting they have exceeded options traders' volatility expectations in the past year [6]

Group 1 - The airline earnings season began positively, with Delta Air Lines exceeding expectations and boosting investor confidence across the sector [1][3] - Delta's first-quarter earnings results alleviated investor concerns about inflation and tariffs, and the company reinstated its full-year guidance with an earnings forecast above consensus estimates [3][4] - The strong performance of Delta has led to increased stock prices for American Airlines and other carriers, indicating robust demand during the summer vacation season [4] Group 2 - American Airlines has a significant long-term debt of $29.4 billion, which is approximately double that of Delta, making it more vulnerable to potential downturns [5] - Despite the high debt, American and Delta have similar enterprise value-to-earnings multiples, but Delta is considered a more stable investment option due to the volatility in the airline sector [5]

Core Insights - Delta Air Lines (DAL) reported Q2 2025 earnings of $2.10 per share, exceeding the Zacks Consensus Estimate of $2.04, but reflecting an 11% year-over-year decline due to high labor costs [1][10] - Revenues for the quarter reached $16.65 billion, surpassing the Zacks Consensus Estimate of $16.2 billion, with adjusted operating revenues increasing 1% year-over-year to $15.5 billion [2][10] - DAL reinstated its full-year 2025 guidance, projecting earnings between $5.25 and $6.25 per share, with free cash flow expected to be between $3 billion and $4 billion [3][10] Financial Performance - Passenger revenues, which constituted 83.3% of total revenues, remained flat year-over-year at $13.9 billion, exceeding estimates [4] - Cargo revenues increased by 7% year-over-year to $212 million, surpassing estimates, while other revenues decreased by 2% to $2.6 billion [5] - Total operating expenses rose by 1% to $14.55 billion, with salaries and related costs increasing by 10% to $4.4 billion due to higher wages from a pilot contract ratified in 2023 [7] Operational Metrics - Revenue passenger miles increased by 2% to 66.4 billion, while capacity expanded by 4% to 77.4 billion [6] - The load factor decreased by 180 basis points to 86%, below estimates, and passenger revenue per available seat mile declined by 4% to 17.68 cents [6] - Adjusted operating margin was reported at 13.2%, down from 14.7% a year ago [5] Cash Flow and Debt - At the end of Q2 2025, DAL had cash and cash equivalents of $3.33 billion, down from $4.11 billion a year earlier, with adjusted net debt reduced by $1.7 billion to $16.3 billion [8] - Adjusted operating cash flow for the quarter was $1.8 billion, with gross capital expenditures of $1.2 billion and free cash flow of $733 million [8] Future Guidance - For Q3 2025, DAL expects adjusted earnings per share in the range of $1.25 to $1.75, while the Zacks Consensus Estimate is currently at $2.01 per share [9] - The adjusted operating margin is anticipated to be in the 9-11% range, with revenues expected to remain flat or increase up to 4% compared to Q3 2024 levels [11]

Airline Industry Performance - Delta Air Lines Inc. experienced a 12% surge in stock price after reporting second-quarter results that exceeded both earnings and revenue expectations, indicating a strong demand outlook [1] - American Airlines Group Inc. shares increased by 12.5%, while United Airlines Holdings Inc. saw a 13.5% rise, contributing to a broad rally across the airline sector [2] - The U.S. Global Jets ETF, which tracks airline stocks, rose by 7.2%, marking its best performance since the 90-day tariff pause in April [2] Economic Indicators - The U.S. labor market showed resilience with initial jobless claims dropping to 237,000, surpassing forecasts, although continuing claims rose to 1.965 million, the highest since 2021 [6] Commodity Market Reactions - Copper futures increased by 2.2% to approximately $5.60 per pound, with silver and palladium also seeing gains of 1.6% and 3.6% respectively, driven by expectations of tightening supply [5] - Crude oil prices fell over 2% amid reports that OPEC+ is considering halting planned production increases starting in October, raising concerns about potential oversupply [5] Stock Market Overview - Major indices showed mixed performance, with the Russell 2000 up 0.7%, Dow Jones up 0.6%, and S&P 500 up 0.2%, while Nasdaq 100 slipped by 0.3% [7] - The Vanguard S&P 500 ETF inched up 0.2%, while the SPDR Dow Jones Industrial Average rose by 0.6% [9] Company-Specific Movements - Norwegian Cruise Line Holdings Ltd. rose over 4% after NorthCoast Research raised its price target, reiterating a 'Buy' rating [10] - Freeport-McMoRan Inc. climbed 3.3% as copper prices continued to rise amid supply concerns [10] - Nu Holdings Ltd. dropped 5.1% following the announcement of a 50% tariff on Brazilian imports, leading to a selloff in Brazil-linked assets [10]

Economic Indicators - Initial Jobless Claims decreased for the fourth consecutive week to 227K, down from a near-term high of 250K four weeks ago, marking the lowest level since May 17th [2] - Continuing Claims increased to 1.965 million from a revised 1.955 million, the highest since November 2021, with four of the past five weeks above 1.95 million [3][4] Company Earnings - Delta Air Lines reported Q2 earnings of $2.10 per share, beating expectations by 9 cents, with revenues of $16.6 billion, slightly above the expected $16.01 billion [5][6] - Delta raised its earnings guidance for Q3 to a range of $1.25-1.75 per share and for the full fiscal year to $5.25-6.25 per share, exceeding analysts' projections [6] - Conagra missed fiscal Q4 earnings expectations, reporting 56 cents per share against the expected 59 cents, with revenues of $2.78 billion below the anticipated $2.84 billion, leading to an 8% drop in shares [6]