Delta Air Lines Inc shares rose after it posted higher-than-expected adjusted earnings for the first quarter of the 2026 financial year (Q1 FY26), while forecasting second-quarter profits below expectations and scaling back growth plans.
Delta reported a net loss of US$289 million (A$409.8 million), or 44 cents per share, in Q1 compared with net income of $240 million, or earnings per share (EPS) of 37 cents, in the previous corresponding period (pcp), as the Middle East war lifted fuel costs.
Adjusted for one-off items, net income soared 45% to $423 million, and diluted EPS jumped 44% to 64 cents as operating revenue rose 13% to $15.854 billion.
Although the American carrier beat analysts' EPS expectations of 57 cents in Q1, it forecast adjusted EPS of $1 to $1.50 for Q2, compared with estimates of $1.41 a share.
Delta said its fuel bill would be $2 billion higher in Q2 because of the spike in costs.
Chief Executive Officer Ed Bastian said the airline delivered earnings that were more than 40% higher than the pcp despite a significant increase in fuel costs and operational disruptions across the industry.
He said Delta was taking action to protect margins and cash flow, although demand remained strong.
“This includes meaningfully reducing capacity growth, with a downward bias until the fuel environment improves, and moving quickly to recapture higher fuel costs,” he said in a news release.
The Atlanta-based carrier also decided not to update its full-year outlook as Bastian said uncertainty about fuel-price spike made that "imprudent".
Fuel usually represents about 25% of an airline’s operating costs, leaving them vulnerable to rising prices because they cannot adjust fares as quickly.
Delta is the first of the major U.S. airlines to report first-quarter results for FY26.
Delta shares (NYSE: DAL) closed $2.46 (3.75%) higher at $68.08 on Wednesday (Thursday AEST), capitalising the company at $44.74 billion.
