Delta reports strong Q3 earnings, CEO sees 'significant improvement' in revenue outlook

Core Insights - Delta Air Lines reported strong third quarter results, with stock rising over 7% in early trading, positively impacting other airline stocks [1] Financial Performance - Delta's adjusted revenue for the quarter was $15.197 billion, exceeding estimates of $15.08 billion and reflecting a 4.1% increase year-over-year [2] - Adjusted earnings per share (EPS) were $1.71, surpassing the expected $1.56 [2] - Adjusted operating income was $1.7 billion, with an operating margin of 11.2%, down 1.7% from the previous year [2] Management Commentary - CEO Ed Bastian noted a significant recovery in revenue, particularly after earlier challenges due to geopolitical events and tariff announcements, which had negatively impacted consumer confidence [3] - Bastian expressed optimism about the company's trajectory, indicating a return to expected performance levels [3] Future Guidance - Delta projected full-year adjusted EPS of approximately $6, which is in the upper half of prior guidance and above analyst estimates of $5.80 [4] - The company anticipates full-year free cash flow of $3.5 billion to $4 billion, aligning with long-term targets [5] - For Q4, Delta expects an operating margin of 10.5% to 12%, adjusted EPS of $1.60 to $1.90, and revenue growth of 2% to 4% [5] Operational Metrics - Total adjusted revenue per available seat mile (TRASM) was $0.19, reflecting a 0.3% increase compared to the previous year [6] - Domestic revenue increased by 5%, and corporate sales rose by 8%, with 90% of surveyed companies expecting travel volume to rise or remain steady in 2026 [7]