Delta affirms 2026 forecast, sees Q3 earnings up to $2.50 a share

Delta Air Lines reaffirmed its full-year 2026 adjusted earnings forecast of $6.50 to $7.50 a share and free cash flow guidance of $3 billion to $4 billion, while projecting September-quarter revenue growth in the mid-teens, an operating margin of 11% to 13% and earnings of $2.00 to $2.50 a share. The airline said June-quarter results exceeded guidance as broad demand strength, premium travel, loyalty revenue and other higher-margin businesses helped offset a sharp increase in fuel costs. For the June quarter, Delta reported GAAP operating revenue of $19.8 billion, operating income of $1.9 billion and net income of $1.6 billion, or $2.44 a share. On an adjusted basis, operating revenue rose 13.9% from a year earlier to a record $17.7 billion, pre-tax income was $1.4 billion and earnings were $1.56 a share. Adjusted fuel expense climbed 77% year over year to $4.4 billion, while adjusted fuel price rose 75% to $3.93 per gallon. Demand remained broad-based across the network. Delta said adjusted total unit revenue rose 12.4%, main cabin unit revenue grew at a double-digit rate for a second straight quarter, domestic unit revenue increased 12% and international unit revenue rose 8%, led by Latin America. Premium revenue increased 17%, loyalty and related revenue grew 19%, American Express remuneration rose 16% to $2.4 billion, MRO revenue increased 32% and cargo revenue jumped 39%. The company said diversified revenue streams accounted for 61% of total revenue, up 2 percentage points from a year earlier. Corporate sales grew at a double-digit pace in all sectors, led by Aerospace & Defense, Banking and Automotive, while premium corporate sales rose more than 25%. Delta also said it continued to strengthen its balance sheet, reducing adjusted net debt to $13.6 billion at quarter-end from the end of 2025, and expects gross leverage of about 2x by year-end. The carrier generated $1.7 billion of adjusted operating cash flow and $209 million of free cash flow in the quarter, and said it would raise its dividend by 15% beginning in the September quarter.