Delta stock pops after earnings beat, ‘murky’ outlook amid tariff uncertainty

Delta Air Lines (DAL) reported that revenue growth stalled in the first quarter and the company did not reaffirm its full-year guidance, citing headwinds from the economic uncertainty around global trade.

“The level of uncertainty that we’re facing coming out of the global trade discussions and skirmishes is a bit unprecedented,” Delta Air Lines CEO Ed Bastian told Yahoo Finance. “Our bookings are pretty good. They have a pretty good line of sight for the next 60 to 90 days, but beyond that, it’s a bit murky. And it would not be responsible to try to give an estimate in light of such uncertainty.”

Delta stock rose more than 3% during premarket trading on Wednesday. Shares of the air carrier have fallen 15% in the past week as the Trump administration’s tariff policies roil markets.

Read more about how Delta’s stock is trading and today’s market action.

Investors had Delta’s earnings report on their radar as an early indication of how President Trump’s trade policies and market volatility are affecting consumer and corporate confidence.

Delta beat profit estimates for the three months ending March 31, while revenues just missed analyst expectations. Last month, Delta cut its outlook for the first quarter amid “macro uncertainty.”

Here’s how Delta performed in the first quarter versus consensus estimates compiled by Bloomberg:

• Adjusted net income: $298 million vs. $253 million expected

• Adjusted earnings per share: $0.46 vs. $0.39 expected

• Revenue: $12.98 billion vs. $12.99 billion expected

For the second quarter, Delta anticipates flat year-over-year revenue growth at the midpoint of its guidance as it navigates a “slower-growth environment.” The company said it will provide an update on its full-year 2025 financial guidance later in the year.

Notably, the earnings release made no mention of the February Endeavor Air 4819 flight that crash-landed in Toronto, as any financial impact was overshadowed by geopolitical policy. Since late March, Delta has largely abstained from comment while investigations continue.

The results for the first three months of 2025 revealed pressure on corporate travel, which was present throughout the quarter.

Delta cited a reduction in corporate confidence as why its corporate travel revenue growth moderated in February and March. The company’s corporate travel sales were up by low single digits in Q1 compared to the prior year, and the banking and technology sectors drove the bulk of business trips.

“I would say that at the present time, it’s shaping up to be to be a ‘strong’, not a ’great’ season,” Bastian said. “‘Great’ would be the plan that we have, which is 7% growth for the year … I think the way that best describes our revenue at the present time across the board is ‘stalled.’”

Bastian said Delta hasn’t been affected by a decline in foreign travelers to the United States due to changing global opinions of the US amid President Trump’s tariff push.

“Our consumer is a US traveler heading abroad, and I can tell you they continue to book their summer plans, and they’re planning on traveling internationally,” he said.

Still, Bastian told Yahoo Finance that he believes three operational efforts are key for financial sustainability.

First, in the second half of the year, Delta will reduce its planned capacity growth by 3% to 4% compared to early 2025 projections in order to more closely align capacity with the levels seen in prior years.

Second, Bastian said Delta will maintain its existing headcount while accounting for natural attrition, or voluntary departures.

And third, Delta plans to reduce capital expenditures, which airlines typically use to invest in assets like new aircraft, terminal upgrades, and technology systems, to lower its “cost of flying.”

“It’s just one set of actions that’s caused this level of alarm,” Bastian said, referring to the new US trade policies. “So, hopefully, we’ll have resolution in the coming months here so that we can get back to our growth trajectory. But I think until there’s a little bit of clarity on the horizon, we’re going to have to go a bit into defensive mode and at least take out any of the cost of growth in our business to the best we can.”

Based on throughput data from TSA, air travel this year remains on pace with 2024 — a record year with 904 million checkpoint screenings.

However, recent consumer confidence readings have flashed warning signals for industry leaders and analysts. In March, the Conference Board’s consumer confidence expectations index tumbled to a 12-year low while the University of Michigan’s consumer sentiment index fell for the third straight month.

Read more: What Trump’s tariffs mean for the economy and your wallet

Data from Moody’s Analytics found that, among consumer groups, households earning $250,000 or more annually hold up 50% of consumer spending, the sweet spot for the premium consumer Delta targets.

“We know we’re not immune … whether it’s the wealth effect or other things that could cause some question in that space, and we’re prepared to take action,” Bastian said. He added that Delta’s premium offerings “all are showing great resilience” and continue to grow on a quarter-over-quarter basis.

In repeatedly acknowledging the “unprecedented” uncertainty, Bastian is setting the tone for a ripening earnings season.

With other airlines such as United Airlines (UAL), American Airlines (AAL), and Southwest (LUV) set to report earnings in the coming weeks, Citi analysts noted that volatility for the big four stocks was “unlikely to subside.”

“Well, I think we’re going to hear the word uncertainty a lot,” Allspring Global Investments senior portfolio manager Bryant VanCronkhite told Yahoo Finance. “Then from there, I think [what] we want to hear is strategic importance. I want to hear companies talk about what matters to them. The last thing you want to do is cede control as an investor to the things we can’t predict the changes in GDP, the changes in inflation, the changes in tariffs. But what I can predict with confidence is how this company is going to invest in growing their future value and how they’re going to control their own destiny.”

After that, the next big test for the airline industry may well arrive in two months at the 2025 Paris Air Show.

“Any international discussions probably are going to be deferred until there’s there’s better clarity there as to what the impact of these trade discussions and where this ends,” Bastian said about whether to anticipate major deals or announcements. “But on balance, people [air travel executives] are running their businesses.”

And in the meantime, Delta’s Bastian, like many executives across sectors, has the ear of the Trump administration.

“Well, our team is in constant communication with the administration and at all levels, and we certainly let them know how our business is doing,” Bastian said. “This administration is always quite interested in learning and seeing how we’re performing, and they continue to do their best to prioritize their home airlines, the US airlines, and industry.”

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