Delta Beats Q1 Earnings & Revenue Estimates, Withdraws FY25 View

Core Viewpoint - Delta Air Lines reported first-quarter 2025 earnings of 46 cents per share, exceeding the Zacks Consensus Estimate of 40 cents, with a year-over-year increase of 2.2% attributed to low fuel costs [1] Financial Performance - Revenues for the quarter reached $14.04 billion, surpassing the Zacks Consensus Estimate of$13.81 billion, and reflecting a year-over-year increase of 2.1% [3] - Adjusted operating revenues, excluding third-party refinery sales, increased 3.3% year over year to $13 billion [3] - Passenger revenues, which constituted 81.8$11.48 billion, although this fell short of the estimate of $11.58 billion [5] - Cargo revenues improved 17$208 million, exceeding the estimate of $185.4 million [6] - Total operating expenses increased 3$13.47 billion, with salaries and related costs rising 8% to $4.1 billion due to higher wages from a pilot contract ratified in 2023 [8] Capacity and Demand - To address weak demand, Delta reduced planned capacity growth in the second half of 2025 to flat year over year, aiming to protect margins and avoid fare reductions [4] - Domestic passenger revenues saw a marginal increase of 1$1.7 to $2.3, with the Zacks Consensus Estimate currently at$2.62 per share [11] - The adjusted operating margin is anticipated to be between 11% and 14%, with revenues expected to either decline by 2% or increase by up to 2% year over year [11] Cash Position - At the end of the first quarter of 2025, Delta had cash and cash equivalents of $3.71 billion, down from$3.87 billion at the end of the first quarter of 2024 [9] - Adjusted net debt decreased by $1.1 billion to$16.9 billion at the end of the March quarter [9]