Delta Shares Rise 12% Despite Lowered Profit Forecast, As Airline Reinstates 2025 Guidance
Delta shares rise by 12% on Thursday following the company’s second-quarter earnings report, which brought a wave of investor optimism despite a downward revision in its full-year profit forecast. This marks a significant rebound for the airline, which had previously withdrawn its guidance in April amid broader economic uncertainties.
What Happened?
In its latest quarterly update, Delta announced it is now projecting full-year earnings of $5.25 to $6.25 per share, significantly lower than its previous estimate of $7.35 per share issued in January. That forecast had originally accompanied a bold declaration from CEO Ed Bastian, who said he expected 2025 to be the airline’s “all-time best year in our history.”
However, the outlook changed dramatically in April when Delta pulled its guidance, citing heightened uncertainty tied to global economic conditions and President Donald Trump’s April 2 “Liberation Day” tariff announcement, which raised fears of slowing consumer spending.
Despite the lower expectations, Wall Street responded positively. The stock’s 12% gain on Thursday reflects investors’ belief that Delta has effectively stabilized its operations and is positioning itself well for a recovery in consumer demand.
Stabilizing Demand and Growing Optimism
Delta executives expressed growing confidence during Thursday’s investor call. CEO Ed Bastian noted that booking trends have stabilized following a dip earlier in the year and added that consumer confidence is “slowly starting to climb back.”
“We were worried, I think, in the earlier part of the year about the wealth effect—what’s going on in markets and other financial instruments—but that’s corrected itself,” Bastian said. “There seems to be growing optimism, though clearly, we still have a long way to go.”
He emphasized that Delta’s core customer base includes households with an income of $100,000 or more, which makes up roughly 40% of U.S. households. These consumers, he explained, are now showing signs of renewed financial stability and spending confidence.
Adjusting to Market Realities
Delta, like other major U.S. carriers, has taken steps to adapt to shifting demand by scaling back capacity. “We have proactively adjusted capacity to address areas of softness,” said President Glen Hauenstein.
As a result of these industry-wide supply adjustments, Delta expects unit revenue trends to improve through the second half of 2025, which could further strengthen financial performance despite the current challenges.
Market Reaction and Industry Impact
Following Delta’s earnings release, the Dow Jones U.S. Airlines Index, which tracks the performance of major U.S. airlines such as American, United, Southwest, and Delta, rose by 11%, underscoring the broader market’s upbeat sentiment.
Other major carriers are expected to report their second-quarter earnings later this month. The positive reaction to Delta’s results could set the tone for the rest of the industry if similar patterns of stabilization and cautious optimism are echoed.
Looking Ahead: What’s Still Uncertain?
While the near-term outlook has improved, uncertainty still looms. The Biden administration recently delayed a new wave of tariffs—initially introduced under Trump’s economic policies—until August 1. It remains unclear how these tariffs may impact consumer behavior, travel demand, and broader market sentiment heading into the fall.
Big Number: $15.51 Billion
Delta forecasts $15.51 billion in adjusted revenue for 2025, slightly above Wall Street’s consensus estimate of $15.48 billion. While the figure represents only a modest increase, it suggests Delta expects to maintain steady growth in the face of ongoing macroeconomic headwinds.
Bottom Line
Delta’s stock rally on Thursday shows that investors are willing to reward proactive management and improving demand signals—even in the face of lowered profit forecasts. With travel slowly rebounding and consumers regaining confidence, Delta may be well-positioned for a steady climb throughout the remainder of 2025.
