Delta Air Lines (DAL) 4Q 2024 Earnings

Delta Airlines’ First-Quarter Outlook Toppes Expectations

Delta Air Lines’ first-quarter outlook on Friday topped analyst expectations as the carrier forecast strong travel demand to start the year, which CEO Ed Bastian said will likely be the carrier’s best ever.

Strong Financial Projections

Delta said it expects to generate more than $4 billion in free cash this year, up 18% from 2024 and in the midpoint of its annual target of between $3 billion and $5 billion. For the full year, it expects annual adjusted earnings more than $7.35 per share.

CEO’s Comments

"We feel quite good coming into the new year," Bastian told CNBC. "Everywhere, we see consumers continue to prioritize experience over goods." That is setting up Delta for "our best financial year in our history," Bastian added.

Financial Results

Here’s how the company performed in the three months ended Dec. 31 compared with Wall Street expectations based on consensus estimates from LSEG:

• Earnings per share: $1.85 adjusted vs. $1.75 expected
• Revenue: $14.44 billion adjusted vs. $14.18 billion expected

Revenue and Earnings Projections

Delta expects revenue to rise 7% to 9%, ahead of the roughly 5% growth analysts polled by LSEG had forecast. The carrier expects first-quarter earnings per share of between 70 cents and $1, slightly ahead of Wall Street predictions of between 65 cents and 97 cents.

Premium Travel Demand

Delta has said it’s been capitalizing on a boom in premium travel as more customers shell out for roomier seats or rewards credit cards. The airline has seen a rise in demand for premium seats, such as first class and premium economy, which rose 8% in the fourth quarter to $5.2 billion.

Stock Performance

Delta shares were up more than 9% in morning trading. Airline stocks have rallied in recent months, with shares in Delta’s chief rival, United Airlines, gaining more than 130% over the past 12 months.

Partnership with American Express

Delta’s partnership with American Express brought in $2 billion in the fourth quarter, up 14% from the year-earlier period. Revenue from premium seats rose 8% in the fourth quarter to $5.2 billion compared with a 2% rise in main cabin ticket revenue to about $6 billion.

Conclusion

Delta’s strong financial projections and positive outlook suggest that the carrier is poised for a strong year. The airline’s focus on premium travel and its partnership with American Express are likely to drive revenue and earnings growth.

Frequently Asked Questions

Q: What is Delta Air Lines’ free cash generation projection for 2025?
A: Delta expects to generate more than $4 billion in free cash this year.

Q: What is Delta’s annual adjusted earnings projection for 2025?
A: Delta expects annual adjusted earnings of more than $7.35 per share.

Q: Why is Delta expecting strong travel demand in the first quarter?
A: Delta is expecting strong travel demand in the first quarter due to consumers continuing to prioritize experience over goods, according to CEO Ed Bastian.