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Delta Air Lines Earnings Surpass Estimates in Q4, Increase Y/Y
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Delta Air Lines (DAL - Free Report) reported fourth-quarter 2024 earnings (excluding 56 cents from non-recurring items) of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.76. Earnings increased 44.5% on a year-over-year basis due to low fuel costs.
Revenues of $15.56 billion surpassed the Zacks Consensus Estimate of $14.99 billion and increased 9.4% on a year-over-year basis, driven by strong holiday travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.44 billion, up 5.7% year over year.
Passenger revenues, which accounted for 82.4% of total revenues, increased 5% year over year at $12.82 billion, beating our estimate of $12.64 billion.
Domestic passenger revenues increased 5% year over year, driven by strong holiday travel demand. International demand remained strong with trends improving throughout the December quarter, particularly in the Transatlantic market.
Cargo revenues improved 32% year over year to $249 million, which surpassed our estimate of $204.9 million. Other revenues increased 34% to $2.49 billion, beating our estimate of $2.13 billion.
Delta Air Lines, Inc. Price, Consensus and EPS Surprise
Adjusted operating margin was 12% in the final quarter of 2024 compared with 9.7% a year ago.
Below, we present all figures (in percentage terms) in comparison with fourth-quarter 2023 results.
Revenue passenger miles (a measure of air traffic) increased 5% to 60.38 billion. Capacity (measured in available seat miles) expanded 5% to 72 billion. The load factor (percentage of seats filled by passengers) was flat at 84%, below our estimate of 85%.
Passenger revenue per available seat mile was flat at 17.79 cents. Passenger mile yield increased 1% to 21.22 cents. On an adjusted basis, total revenue per available seat mile inched up 0.4% to 20.04 cents.
Total operating expenses, including special items, increased 7% to $13.84 billion. Salaries and related costs rose 9% to $4.13 billion. The increase was due to higher wages stemming from the contract with pilots that was ratified last year. Fuel gallons consumed jumped 4% to $1 billion. Average fuel price per gallon (adjusted) fell 22% to $2.34. Non-fuel unit cost (adjusted or CASM-Ex) increased 3.3% to 13.72 cents.
DAL exited the fourth quarter of 2024 with cash and cash equivalents of $3.1 billion compared with $2.84 billion at the end of the fourth quarter of 2023. The company had an adjusted net debt of $18 billion at the end of the December quarter. Adjusted operating cash flow in the December quarter was $1.8 billion, with gross capital expenditures and free cash flow of $1.2 billion and $678 million, respectively.
DAL Issues Impressive Outlook
Delta Air Lines, currently carrying a Zack Rank #3 (Hold), expects first-quarter 2025 adjusted earnings to be 70 cents-$1 per share. The midpoint of the guided range is below the Zacks Consensus Estimate of 72 cents. The adjusted operating margin in the March quarter is expected to be in the 6-8% range. Management anticipates first-quarter 2025 total revenues (adjusted) to increase in the 7-9% band from first-quarter 2024 actuals.
The company’s CEO Ed Bastian expects 2025 to be the carrier’s best. Delta expects current-year adjusted earnings to be more than $7.35 per share. The guidance indicates more than 10% year-over-year growth. The Zacks Consensus Estimate is currently pegged at $7.28 per share. DAL expects to generate more than $4 billion in free cash flow in 2025.
Airline Stocks to Consider
Investors interested in the Zacks Airline industry may consider better-ranked stocks like AmericanAirlines (AAL - Free Report) and United Airlines (UAL - Free Report) .
AAL has an expected earnings year-over-year growth rate of 39.7% for 2025. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 124.4%. Shares of AAL have risen 24.8% in the past year.
United Airlines presently flaunts a Zacks Rank #1. UAL has an expected earnings growth rate of 17.6% for 2025.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 26.9%. Shares of UAL have climbed 145.9% in the past year.
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Delta Air Lines Earnings Surpass Estimates in Q4, Increase Y/Y
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2024 earnings (excluding 56 cents from non-recurring items) of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.76. Earnings increased 44.5% on a year-over-year basis due to low fuel costs.
Find latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenues of $15.56 billion surpassed the Zacks Consensus Estimate of $14.99 billion and increased 9.4% on a year-over-year basis, driven by strong holiday travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.44 billion, up 5.7% year over year.
Passenger revenues, which accounted for 82.4% of total revenues, increased 5% year over year at $12.82 billion, beating our estimate of $12.64 billion.
Domestic passenger revenues increased 5% year over year, driven by strong holiday travel demand. International demand remained strong with trends improving throughout the December quarter, particularly in the Transatlantic market.
Cargo revenues improved 32% year over year to $249 million, which surpassed our estimate of $204.9 million. Other revenues increased 34% to $2.49 billion, beating our estimate of $2.13 billion.
Delta Air Lines, Inc. Price, Consensus and EPS Surprise
Delta Air Lines, Inc. price-consensus-eps-surprise-chart | Delta Air Lines, Inc. Quote
Other Aspects of Q4 Earnings Report
Adjusted operating margin was 12% in the final quarter of 2024 compared with 9.7% a year ago.
Below, we present all figures (in percentage terms) in comparison with fourth-quarter 2023 results.
Revenue passenger miles (a measure of air traffic) increased 5% to 60.38 billion. Capacity (measured in available seat miles) expanded 5% to 72 billion. The load factor (percentage of seats filled by passengers) was flat at 84%, below our estimate of 85%.
Passenger revenue per available seat mile was flat at 17.79 cents. Passenger mile yield increased 1% to 21.22 cents. On an adjusted basis, total revenue per available seat mile inched up 0.4% to 20.04 cents.
Total operating expenses, including special items, increased 7% to $13.84 billion. Salaries and related costs rose 9% to $4.13 billion. The increase was due to higher wages stemming from the contract with pilots that was ratified last year. Fuel gallons consumed jumped 4% to $1 billion. Average fuel price per gallon (adjusted) fell 22% to $2.34. Non-fuel unit cost (adjusted or CASM-Ex) increased 3.3% to 13.72 cents.
DAL exited the fourth quarter of 2024 with cash and cash equivalents of $3.1 billion compared with $2.84 billion at the end of the fourth quarter of 2023. The company had an adjusted net debt of $18 billion at the end of the December quarter. Adjusted operating cash flow in the December quarter was $1.8 billion, with gross capital expenditures and free cash flow of $1.2 billion and $678 million, respectively.
DAL Issues Impressive Outlook
Delta Air Lines, currently carrying a Zack Rank #3 (Hold), expects first-quarter 2025 adjusted earnings to be 70 cents-$1 per share. The midpoint of the guided range is below the Zacks Consensus Estimate of 72 cents. The adjusted operating margin in the March quarter is expected to be in the 6-8% range. Management anticipates first-quarter 2025 total revenues (adjusted) to increase in the 7-9% band from first-quarter 2024 actuals.
The company’s CEO Ed Bastian expects 2025 to be the carrier’s best. Delta expects current-year adjusted earnings to be more than $7.35 per share. The guidance indicates more than 10% year-over-year growth. The Zacks Consensus Estimate is currently pegged at $7.28 per share. DAL expects to generate more than $4 billion in free cash flow in 2025.
Airline Stocks to Consider
Investors interested in the Zacks Airline industry may consider better-ranked stocks like American Airlines (AAL - Free Report) and United Airlines (UAL - Free Report) .
American Airlines currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AAL has an expected earnings year-over-year growth rate of 39.7% for 2025. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 124.4%. Shares of AAL have risen 24.8% in the past year.
United Airlines presently flaunts a Zacks Rank #1. UAL has an expected earnings growth rate of 17.6% for 2025.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 26.9%. Shares of UAL have climbed 145.9% in the past year.