Delta Lowers Full-Year Earnings Outlook Amid High Fuel Costs; Third-Quarter Results Miss Views

09:48 AM EDT, 10/09/2026 (MT Newswires) -- Delta Air Lines (DAL) slashed its full-year earnings outlook on Friday amid elevated fuel costs, while the air carrier's third-quarter results fell short of market estimates despite robust travel demand. The company now expects adjusted earnings of $5.10 to $5.60 per share for 2026, down from its previous guidance of $6.50 to $7.50. The consensus on FactSet is for non-GAAP EPS of $5.51. The stock fell 2.9% in Friday trading. Delta also expects free cash flow of about $2.5 billion for the year, down from its prior outlook of $3 billion to $4 billion. "For the full year, we expect to generate a pre-tax profit of roughly $4.5 billion, absorbing a $6 billion increase in fuel costs," Chief Executive Ed Bastian said in a statement. "Looking ahead, our focus remains on profitable growth and delivering against our long-term financial framework, including mid-teens margins and returns, durable free cash flow and gross leverage of approximately one times." For the three months through September, Delta's adjusted EPS rose to $1.72 from $1.70, but trailed the Street's $1.77 view and fell below the airline's guidance of $2 to $2.50. The company absorbed more than $500 million in higher fuel costs versus its projections in July, according to Chief Financial Officer Erik Snell. Fuel price surged 60% to $3.61 per gallon on an adjusted basis, pushing fuel expenses 62% higher annually to $4.14 billion, the airline said. Jet fuel's average price rose to $187.34 per barrel last week from $185.43 the week before, according to data published by the International Air Transport Association. Crude oil prices have moved higher for three straight months through September amid fears of prolonged global supply disruptions driven by the US-Iran conflict. Adjusted operating revenue climbed 16% to $17.59 billion on flat capacity, but missed the average analyst estimate of $17.65 billion. Adjusted total revenue per available seat mile advanced 15%, with gains across all regions. Passenger revenue increased 15% to $15.53 billion, while cargo revenue rose 29%. "Demand remains strong, supported by consumers' growing preference for experiences and travel, with air travel continuing to be one of the best values in the consumer economy," Bastian said. For the ongoing three-month period, Delta anticipates adjusted EPS between $1.15 and $1.65 and 20% revenue growth. The Street is looking for non-GAAP EPS of $1.43 and 18% sales growth. The airline is continuing to see revenue momentum in the current quarter, with "strength across all products and geographies," Chief Commercial Officer Joe Esposito said in the earnings release. The company expects another quarter of "sequential improvement" in unit revenue, supported by its capacity positioning, with seats growing less than 2%, according to Esposito. "With slightly higher capacity and continued operational efficiencies, we expect December quarter non-fuel unit cost growth to improve 1 to 2 points sequentially," Snell said. Non-fuel costs per available seat mile were up 7.3% in the third quarter. "Looking to next year, we remain on track for low-single-digit unit cost growth as capacity normalizes, operational improvements continue and we lap higher costs in our baseline," the CFO added. Delta forecasts an all-in fuel price of about $4.25 per gallon in the current quarter, including a refinery benefit of about 40 cents per gallon. In an emailed client note on Thursday, Morgan Stanley said investors are likely to focus on how airlines will tackle future capacity and cost pressures amid persistently high jet fuel prices, instead of their earnings performance this season. Rivals United Airlines (UAL), American Airlines (AAL), Alaska Air (ALK), Southwest Airlines (LUV) and JetBlue Airways (JBLU) are all expected to release their quarterly results later this month. Price: 79.39, Change: -2.79, Percent Change: -3.39