Key Highlights

● Delta earned $1.72 a share, below estimates of $1.82 to $1.92.

● Full-year guidance fell to $5.10 to $5.60 from $6.50 to $7.50.

● The airline expects about $6 billion of added fuel costs.

● Shares recovered from a premarket slide to close little changed.

Delta Air Lines (NYSE:DAL) opened the third-quarter earnings season for US airlines on Friday with numbers that fell short of Wall Street's hopes. The stock slid before the opening bell, trading near $79.80 in premarket action according to market data. By the close, however, the shares had recovered to finish little changed.

Delta reported adjusted earnings of $1.72 a share for the third quarter. Consensus estimates ranged from $1.82 to $1.92 depending on the source, and it was the airline's first earnings miss in two years. Adjusted revenue came in at about $17.6 billion, broadly in line with expectations and up from a year earlier. Passenger revenue was $15.53 billion and cargo revenue $301 million.

Fuel is the problem

The bigger shock was the outlook. Delta cut its 2026 adjusted earnings guidance to $5.10 to $5.60 a share, down from $6.50 to $7.50, and guided to fourth-quarter adjusted earnings of $1.15 to $1.65 a share. Higher fuel prices were a key reason.

Delta's third-quarter fuel bill reached $4.1 billion, far above a year earlier, and the airline expects to absorb about $6 billion in added fuel costs this year. Oil prices have been elevated amid the conflict involving Iran. Brent crude settled at $104.72 a barrel on Friday, and US crude at $91.85. Hurricane Isaias has also shut in nearly two-thirds of oil output in the Gulf of Mexico. The US average diesel price stood at $6.28 a gallon, according to market data.

Management points to demand

Market reports did not give a single reason for the rebound, but management stressed demand. Chief executive Ed Bastian said: "The consumer response continues to be quite strong." He added: "Demand remains strong, supported by consumers' growing preference for experiences and travel".

Fuel remains the main pressure on the outlook. On energy prices, President Donald Trump said on Truth Social that "Diesel Prices for Americans and, indeed, the World, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!" after announcing a deal under which Russia would supply diesel. He also said the US would not attack Iran before the November 3 midterm elections.

The broader market tone helped too. The S&P 500 rose 46.18 points to 7,811.54, just below its record close, and the Dow gained 423.31 points to 51,654.95. Consumer discretionary and financial stocks were among the leaders.

Ripples across the airline group

Not everyone shrugged off the report. United Airlines (NASDAQ:UAL) and American Airlines (NASDAQ:AAL) slipped as investors weighed what Delta's fuel bill means for their own results. UBS (NYSE:UBS) cut its 2026 and 2027 estimates and price targets for Delta, United and American and expects third-quarter misses, while Morgan Stanley (NYSE:MS) trimmed estimates for Delta, United, Alaska Air (NYSE:ALK) and Southwest (NYSE:LUV), according to market data.

United's Report and Oil Prices Will Decide the Group's Next Move

Airline investors will now focus on reports from United and other carriers, and on whether oil prices ease as the White House suggests. Any shift in Gulf of Mexico output as Hurricane Isaias passes could also move fuel costs. Broader catalysts include September consumer price data on Wednesday, October 14, big bank earnings from October 13 to 16 and the Federal Reserve's meeting on October 27 to 28, after the central bank raised rates in September for the first time since 2023. On Monday, October 12, stocks are open while bond trading pauses for Columbus Day.