Delta Cuts Annual Profit Forecast After Fuel Costs Surge
Delta lowered its full-year profit outlook after third-quarter adjusted earnings per share missed expectations, with quarterly fuel expenses rising 62% from a year earlier. Delta shares fell 3%, while United and American declined less, and an airline ETF dropped 0.5%. Premium cabin and loyalty revenue continued growing, helping cushion margin pressure.
Delta's third-quarter adjusted profit of $1.72 per share fell short of analyst expectations. The airline attributed the miss to fuel, which cost 62% more than a year earlier, and reduced its full-year adjusted EPS and free cash flow guidance. Management said the entire downgrade stemmed from fuel and warned next quarter's costs would climb again.
Delta's stock traded at $80, down 3%, while United at $106.50 and American at $12.65 slipped less. The JETS airline ETF lost 0.5%, even as SPY gained 0.4%. Premium cabin, loyalty, and credit-card revenue increased, and Delta plans more capacity next quarter.
If fuel expenses stay elevated, airlines could pass some costs to travelers through higher fares or reduced service, affecting leisure and business passengers. Employees and investors may also feel pressure if margins remain tight. Delta's continued premium and loyalty growth may help protect perks and routes for frequent flyers, though budget-conscious travelers could face fewer affordable options. The broader travel sector may watch whether demand remains strong enough to absorb higher operating costs.