Delta’s first quarter drew a positive market reaction, as investors responded to the airline’s ability to generate steady revenue growth and maintain profitability in a turbulent operating environment. Management credited the quarter’s performance to the continued resilience of higher-margin segments—particularly Premium cabins and Loyalty programs—as well as strong international travel demand. CEO Ed Bastian highlighted Delta’s “industry-leading reliability and premium service,” while President Glen Hauenstein noted, “approximately 60% of our total revenue now comes from diverse, high-margin streams.” Despite softness in domestic Main Cabin demand and a more challenging macroeconomic backdrop, Delta’s diversified revenue mix and operational discipline helped offset these headwinds.
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Delta (DAL) Q1 CY2025 Highlights:
- Revenue: $14.04 billion vs analyst estimates of $13.88 billion (2.1% year-on-year growth, 1.1% beat)
- EPS (GAAP): $0.37 vs analyst expectations of $0.40 (6.9% miss)
- Adjusted EBITDA: $1.2 billion vs analyst estimates of $1.3 billion (8.5% margin, 7.8% miss)
- Revenue Guidance for Q2 CY2025 is $16.66 billion at the midpoint, roughly in line with what analysts were expecting
- EPS (GAAP) guidance for Q2 CY2025 is $2 at the midpoint, missing analyst estimates by 12.1%
- Operating Margin: 4.1%, in line with the same quarter last year
- Revenue Passenger Miles: 55.68 billion, up 1.47 billion year on year
- Market Capitalization: $32.3 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Delta’s Q1 Earnings Call
- Conor Cunningham (Melius Research) questioned whether ongoing domestic softness could spill over to Premium and International segments. President Glen Hauenstein explained they are monitoring closely but see no evidence of weakness outside the Main Cabin yet.
- Andrew Didora (Bank of America) asked about the timing and geographic focus of capacity cuts. Hauenstein clarified that reductions will begin in August, concentrated in the Southeast, and mainly affect off-peak Main Cabin flights.
- Catherine O’Brien (Goldman Sachs) probed how Delta can maintain cost targets while reducing capacity. CFO Dan Janki detailed strategies including flexible labor scheduling, maintenance timing, and supplier negotiations.
- Duane Pfennigwerth (Evercore) sought specifics on which fleet types are being retired and the drivers of loyalty growth. Hauenstein noted focus on retiring 757s, 767s, and older A319/A320s, and that loyalty growth is primarily from increased cardholder spend.
- Tom Fitzgerald (TD Cowen) inquired about competitive dynamics and risk of customer trade-down to low-cost carriers. Hauenstein argued Delta’s strong brand and loyalty program should allow it to retain share, even as yields may fall.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be watching (1) whether capacity reductions improve profitability on domestic routes, (2) the resilience of Premium and International demand as macro uncertainty persists, and (3) the ongoing impact of cost-cutting measures on margins and free cash flow. Fleet retirements, booking trends for summer travel, and the execution of new MRO contracts will also be important markers for Delta’s performance.
Delta currently trades at $48.19, up from $35.92 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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