Adjusted earnings of $1.72 a share missed by 3 cents, Delta's first miss in two years, and full-year guidance fell to $5.10 to $5.60 from $6.50 to $7.50. The airline is assuming fuel near $4.25 a gallon this quarter, up from $3.61.
October 9, 2026
Tickers: DAL, UAL, AAL, LUV, JETS
Delta Air Lines' third quarter showed an airline absorbing a fuel shock without losing customers. Its outlook showed that absorbing it for another quarter costs real money.
For the quarter ended Sept. 30, Delta reported adjusted earnings of $1.72 a share, against $1.70 a year earlier and an analyst estimate of $1.75. Adjusted operating revenue rose 16% to $17.59 billion, slightly short of the $17.67 billion analysts expected. Including $2.6 billion of third-party sales from its refinery, total revenue was $20.19 billion, up 21%. On a reported basis, Delta earned $1.15 a share, down from $2.17.
The fuel bill
Fuel explains the gap between a growing business and flat earnings. Delta's adjusted fuel expense was $4.14 billion, up 62% from a year earlier, at an average price of $3.61 a gallon, up 60%. Chief Financial Officer Erik Snell said the result was "in line with last year while absorbing more than $500 million of higher fuel costs compared to our guidance in early July."
Non-fuel unit costs rose 7.3%. The adjusted operating margin was 9.4%.
The new outlook
The guidance cut is a forward fuel story. Delta now expects full-year adjusted earnings of $5.10 to $5.60 a share, down from $6.50 to $7.50 in July. At the midpoint, that is a cut of about 24%. It expects full-year pretax profit of roughly $4.5 billion while "absorbing a $6 billion increase in fuel costs," and free cash flow of about $2.5 billion, down from as much as $4 billion.
For the fourth quarter, Delta forecast earnings of $1.15 to $1.65 a share, a midpoint below the $1.43 analysts had expected, an operating margin of 7% to 9%, and fuel of about $4.25 a gallon, roughly 18% above the third-quarter average. It also expects total revenue to rise about 20%.
Demand
Management stressed that customers are still flying. Chief Commercial Officer Joe Esposito said revenue momentum is continuing into the December quarter, "supporting our outlook for total revenue growth of approximately 20 percent." Chief Executive Ed Bastian said consumer demand "continues to be quite strong." He also warned the industry more broadly: "If we see today's fuel prices on a sustained basis, you will see fallout of some variety."
The stock
Delta shares opened at $79.68, about 3% below Thursday's close, then recovered to about $81.31 in early afternoon, down 1%. United Airlines was down about 1.3% and the U.S. Global Jets ETF about 0.8%. For a guidance cut of this size, the reaction was muted.
Two readings
One reading is that Delta passed a stress test. Earnings held flat despite a 60% rise in fuel prices, revenue is growing in the high teens, and the fourth-quarter guide implies fares are still rising fast enough to cover much of the cost.
Another reading is that the reset may not be finished. The guidance assumes a fuel price set by the forward curve as of Oct. 2, Brent remains above $100, diesel markets are tight, and a margin of 7% to 9% leaves less room if fuel climbs again.
Next tests
United and American report later this month, and their fuel assumptions will show whether Delta's $4.25 is conservative. The path of jet fuel through the holiday quarter, and whether fourth-quarter revenue growth holds near 20%, will decide where in the new range Delta lands.