Delta Air Lines, Inc. (NYSE:DAL) experienced a slight decline in its stock price following the release of its financial results for the fourth quarter and full fiscal year 2025, coupled with its projections for the first quarter and full year of 2026. The airline highlighted improving market demand and steadfast cost discipline as key features of its outlook.
During the final quarter of 2025, Delta reported operating revenue on a Generally Accepted Accounting Principles (GAAP) basis of $16.003 billion, representing a 3% increase compared with the same period the previous year. GAAP diluted earnings per share (EPS) stood at $1.86 for the quarter. Adjusted earnings per share were reported at $1.55, outperforming Wall Street's consensus estimate of $1.53. Revenue also exceeded expectations, coming in at $16.003 billion versus the forecasted $15.585 billion.
The company recorded GAAP operating income of $1.5 billion, yielding an operating margin of 9.2%, which was a decline from the 11.0% margin achieved in the year-ago quarter. On an adjusted basis, the operating margin decreased to 10.1% from 12.0% in the previous year. Passenger revenue showed modest growth, increasing by 1% year-over-year to $12.916 billion. Meanwhile, cargo revenue saw a slight contraction of 1%, totaling $246 million, and other revenue streams rose by 14% to $2.841 billion.
Available seat miles (ASM), a measure of total passenger carrying capacity, rose by 1.3% to 72.9 billion, whereas revenue passenger miles (RPM), which quantify actual passenger traffic, decreased by 1% to 59.9 billion. The passenger load factor, a key indicator of capacity utilization, slipped to 82% from 84% in the prior year. Total revenue per available seat mile was recorded at 21.94 cents, with adjusted total revenue per available seat mile (TRASM) at 20.02 cents. The non-fuel cost per available seat mile excluding special items (Non-fuel CASM-Ex) increased by 4.0% to 14.27 cents. The average fuel price paid was $2.28 per gallon.
Revenue generated from main-cabin ticket sales declined by 7% relative to the previous year, counterbalanced by a 9% increase in revenue from premium product offerings. Delta noted that approximately 2 percentage points of the revenue growth in the December quarter were affected by the government shutdown, mainly impacting the Domestic segment.
Reviewing fiscal year 2025, Delta reported GAAP operating revenue totaling $63.364 billion and GAAP diluted EPS of $7.66. Adjusted diluted EPS for the year was $5.82. The airline generated operating cash flow of $8.342 billion and free cash flow of $4.643 billion. As of year-end, Delta held $4.310 billion in cash and cash equivalents and a total cash position (including restricted cash) of $4.501 billion. Total debt and lease financing obligations summed to $14.113 billion.
Chief Executive Officer Ed Bastian commented, "We generated $5 billion of pre-tax profit with a double-digit operating margin and record free cash flow of $4.6 billion, all while navigating a challenging environment." He further stated, "2026 is off to a strong start with top-line growth accelerating on consumer and corporate demand. For the full year, we expect to deliver margin expansion and earnings growth of 20% year-over-year."
Delta President Glen Hauenstein added, "Delta generated record revenue of $58.3 billion while sustaining a unit revenue premium relative to the industry of nearly 115%. High-margin, diversified revenue streams grew high-single digits over prior year and reached 60% of total revenue, reflecting the power of Delta's brand, growing demand for our premium products, and the success of our integrated commercial and customer strategy." He also noted a strengthening in cash sales trends since the beginning of 2026, with momentum seen across the booking curve and all geographic regions.
Looking ahead to the first quarter of 2026, Delta expects revenue to grow between 5% and 7% year-over-year, outpacing capacity growth by several points. The airline projects an operating margin in the range of 4.5% to 6% for the March quarter. Adjusted EPS guidance for this period is between 50 cents and 90 cents, relative to the consensus estimate of 70 cents. Revenue forecasts for the quarter range from $14.74 billion to $15.02 billion, surpassing the Street's consensus of $13.63 billion.
For the full fiscal year 2026, Delta forecasts adjusted EPS between $6.50 and $7.50, exceeding the consensus projection of $5.79. The free cash flow is anticipated to range between $3 billion and $4 billion.
In addition to financial guidance, Delta announced a significant fleet enhancement plan. The airline has finalized an agreement with Boeing (NYSE:BA) to acquire thirty 787-10 widebody aircraft, with options to purchase an additional thirty. Deliveries of these aircraft are scheduled to commence in 2031.
Separately, GE Aerospace (NYSE:GE) revealed that its GEnx engines have been selected to power the new Boeing 787-10 aircraft ordered by Delta. This arrangement includes spare engines and a long-term service support package, covering both the initial 30 aircraft and the additional 30 options.
Shares of Delta Air Lines were down 4.97% at $67.50 in premarket trading, reflecting market reactions to the combination of results and forward-looking guidance.