Delta Air Lines Slashes 2026 Profit Forecast After Fuel Costs Surge 62% in Q3

Delta Air Lines reported third-quarter results on October 9 that missed Wall Street earnings estimates for the first time in two years, forcing a sharp cut to its full-year profit outlook as jet fuel costs surged 62% from a year ago, driven by the US-Israeli war with Iran. Adjusted EPS came in at $1.72, below the estimate of $1.82, while adjusted operating revenue of $17.59 billion fell just short of the $17.66 billion consensus. The airline's fuel bill for the quarter reached $4.1 billion, roughly $500 million above the guidance Delta had issued in July.

Delta cut its full-year adjusted EPS guidance to $5.10-$5.60 from a prior range of $6.50-$7.50, and trimmed its free cash flow outlook to approximately $2.5 billion from $3 billion-$4 billion previously. The company said it now expects to absorb a $6 billion increase in total annual fuel costs while still generating a pre-tax profit of about $4.5 billion for the full year. Three-year cumulative free cash flow is still projected at over $10 billion.

For the fourth quarter, Delta guided adjusted EPS of $1.15-$1.65, against a Wall Street estimate of $1.42, with Q4 revenue expected to grow approximately 20% year over year and fuel assumed at about $4.25 per gallon. CEO Ed Bastian told CNBC that underlying passenger demand remains strong, with premium travel continuing to outperform, and reiterated confidence in the airline's long-term framework targeting mid-teens margins and return on invested capital. Delta stock slid on the earnings miss and reduced outlook. Bastian also addressed the airline's decision to skip Starlink, drawing attention after Elon Musk publicly mocked the move ahead of results.