Delta Air Lines topped expectations for Q3 results early Thursday noting record revenue and a boom in international travel. Delta stock has fallen sharply from the 2023 highs it touched in mid-July, but it remains up nearly 6.9% for the year.
Earnings
Delta reported adjusted earnings increased 34.4% to $2.03 per share while adjusted revenue increased 13.3% to a Q3 record $14.55 billion. Total operating income for the quarter was $15.5 billion.
FactSet analysts expected Delta's third-quarter earnings to increase 29.8% to $1.96 per share on 13% revenue growth, to $14.53 billion.
Delta noted steady domestic demand in the release. Domestic passenger revenue increased 6% compared to 2022 on 11% more capacity, as the domestic unit's revenue was down 4% year-over-year. International revenue spiked 35% with record margins across all regions.
"Robust demand for travel on Delta is continuing into the December quarter," Glen Hauenstein, Delta's president, said in the release.
Delta guided Q4 earnings per share to range from $1.05 to $1.30 on 9% to 12% revenue growth. The airline sees full-year earnings between $6 and $6.25 per share while revenue jumps about 20%, which would be about $54.72 billion.
Delta earnings slowed to 86% growth in Q2, after posting triple-digit gains for the four previous quarters. Sales growth decelerated over the past six quarters after spiking in Q1 2022 on the pandemic travel recovery.
Delta Stock
DAL stock fell 2.4% Thursday after surging nearly 2.9% premarket. The stock rose slightly Wednesday. Delta rebounded Tuesday along with American Airlines and United Airlines, as the group clawed back some of Monday's losses.
Shares rallied roughly 51% in the first half of the year to hit their 2023 peak of 49.81 on July 13. Delta stock has steadily fallen the past three months.
For the entire year, Delta stock is up about 6.9% through Thursday's close.
Airlines Drop After Israel Declares War
Airlines fell along with other travel sector stocks Monday as effects of the rising war between Israel and the Palestinian militant group Hamas rippled across the global economy. The stocks reacted strongly on significant disruptions to flight plans and as oil prices surged.
A number of major U.S. and international airlines canceled flights to Israel over the weekend. Twenty-one percent of the flights destined for Ben-Gurion International Airport were canceled on Sunday and Monday, according to flight tracker FlightAware. Ben Gurion is located outside Tel Aviv and within earshot of the explosions, according to Wall Street Journal reports.
Delta suspended flights to and from Tel Aviv through the end of the month, the WSJ reported Monday. The company says it is working to transport employees back to the U.S. and will collaborate with the government to help move U.S. citizens that wish to return. American Airlines and United Airlines temporarily suspended flights in and out of Tel Aviv over the weekend and on Monday. American plans to monitor the situation and make adjustments as needed.
DAL stock fell 4.7% Monday as United shed 4.8% and AAL stock fell 4.1%. Cancellations to and from Tel Aviv are expected to fall to 10% on Wednesday, according to FlightAware. As of Tuesday morning, only 1% of flights destined for Ben-Gurion International Airport on Thursday had been canceled, according to the flight tracker data.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
