From Yahoo Finance: 2025-04-09 07:06:00

Delta Air Lines, previously anticipating its best financial year, now faces uncertainty due to disruptions in global trade, leading to the elimination of its 2025 performance expectations. Walmart also dropped its operating profit guidance, citing tariff risks. Delta is reducing flights in preparation for reduced spending amid higher prices.

CEO Ed Bastian noted broad economic uncertainty has stalled growth, prompting a focus on controlling margins and cash flow. Delta earned 37 cents per share in the first quarter, up from 6 cents a year earlier, when profit was impacted by pilot contracts. Adjusted earnings were 46 cents per share, exceeding analyst expectations.

Delta’s stock rose over 8%, with Citi analysts suggesting it may be the best airline investment during uncertain times. Despite a 41% decline in shares this year due to tariff fears, quarterly revenue rose to $14.04 billion. The average fuel price per gallon also decreased.

In response to economic uncertainty, Delta slashed its first-quarter earnings and revenue outlook, citing weakening demand. The airline previously forecasted a 3-4% revenue increase but revised it down to 7-9%. With conditions worsening, Delta foresees June quarter profitability of $1.5 to $2 billion.

Delta’s 2025 outlook of $7.35 per share and $4 billion in free cash flow has been impacted by the trade war, leading to uncertainty and reduced spending. Despite previous confidence in meeting guidance, CEO Bastian now cites softness in domestic travel due to economic uncertainty. International markets have shown more resilience.

Bastian remains positive about Delta’s profitability and cash flow opportunities in 2025, despite current challenges. Second-quarter earnings are expected to range from $1.70 to $2.30 per share, with revenue either down 2% or up 2%. Analysts predict earnings of $2.21 per share. Delta is adapting to current conditions while staying true to its long-term strategy.

Read more: Delta Air Lines had been expecting a record year. Then a trade war broke out