Delta Takes Flight As Q4 Earnings Beat Expectations, Fueled By Premium Travel Demand And Efficiency Gains

Delta Air Lines, Inc. DAL shares are trading higher premarket after the company reported better-than-expected fourth-quarter 2024 results.

Delta reported fourth-quarter adj. operating revenue growth of 5.7% year-over-year to $14.437 billion. GAAP operating revenue was $15.56 billion (+9.4% YoY), beating the consensus of $14.212 billion.

Adjusted average fuel price was $2.34 per gallon, down from $3.00 from last year’s quarter. Adjusted EPS was $1.85 (+44.5% YoY), beating the consensus of $1.76.

Related: Delta Q4 Earnings Preview: Can Bullish Trends Keep The Stock Flying High?

Total passenger revenue for the quarter grew 5% year over year to $12.815 billion; cargo revenue grew 32% year over year to $249 million, and Other revenue was $2.495 billion (+34% year over year).

Delta recorded an adjusted operating income of $1.735 billion, up from $1.33 billion YoY, with an adjusted operating margin of 12%, up ~230 bps.

Adjusted operating expenses increased by 3% YoY to $12.702 billion, and Adjusted Non-fuel costs were $9.9 billion for the quarter.

Also Read: Delta Expands Premium Travel Experience with Uber, YouTube, and Joby Partnerships

Delta generated an adjusted operating cash flow of $1.8 billion in the December quarter. Full-year adjusted operating cash flow reached $8.0 billion, with gross capital expenditures of $4.8 billion, resulting in $3.4 billion free cash flow for 2024.

Adjusted net debt at the December quarter-end decreased to $18 billion, a reduction of $3.6 billion from the end of 2023. Liquidity stood at $6.1 billion at year-end, including $3.1 billion in undrawn revolver capacity.

The passenger load factor was flat at 84%. DAL’s Air Traffic Liability ended the quarter at $7.1 billion.

“As we move into 2025, we expect strong demand for travel to continue, with consumers increasingly seeking the premium products and experiences that Delta provides. Our differentiated strategy and best-in-class operations, combined with demand strength and an increasingly constructive industry backdrop, position us to deliver the best financial year in Delta’s 100-year history, with pre-tax income greater than $6 billion, earnings per share greater than $7.35 and free cash flow of more than $4 billion,” commented Ed Bastian, Delta’s chief executive officer.

“As efficiency gains continue, we expect non-fuel unit cost growth to continue in the low-single digits for the full year 2025 as efficiencies offset the impact of slower capacity growth and continued investments in our people and the customer experience,” stated Dan Janki, Delta’s chief financial officer.

First Quarter 2025 Outlook (Non-GAAP): DAL’s total revenue is expected to grow 7% – 9% year-over-year with an operating margin of 6% – 8%. Earnings per share are forecasted between $0.70 and $1.00 versus the $0.77 estimate.

2025 Outlook: The company’s EPS is projected at greater than $7.35, reflecting 10%+ YoY growth and 19%+ on a non-GAAP basis.

Price Action: DAL shares are trading higher by 7.78% at $66.20 premarket at the last check Friday.

Read Next:

• US Stocks To Open On A Tentative Note As Traders Remain Cautious Ahead Of Friday’s Crucial Jobs Data

Image via Shutterstock.