Delta is no longer comfortable with the guidance it had issued for 2025 as the trade war scrambles expectations and said it will reduce capacity given economic conditions.
“With broad economic uncertainty around global trade, growth has largely stalled,” CEO Ed Bastian said in a statement on Wednesday. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures.”
Delta earned $240 million, or 37 cents per share, for the quarter. A year earlier it earned $37 million, or 6 cents per share.
Stripping out certain items, earnings were 46 cents per share. That’s better than the 40 cents per share analysts polled by Zacks Investment Research predicted.
Shares of Delta Air Lines Inc. rose nearly 3% before the market open. But the sector has been battered this year as investors, anticipating trouble from rising tariffs, put their money elsewhere. Shares are down 41% this year for the nation’s most profitable airline.
Operating revenue climbed to $14.04 billion from $13.75 billion, beating Wall Street’s estimate of $13.81 billion.
The average fuel price per gallon declined to $2.47 from $2.79.
Delta cut its first-quarter earnings and revenue outlook last month, saying at the time that a recent decline in consumer and corporate confidence amid growing uncertainty over the economy was weakening domestic demand.
The Atlanta company noted that its premium, international and loyalty revenue growth trends remained consistent with expectations.
Delta said in March that it now expected first-quarter revenue to rise between 3% and 4% compared with a year earlier. Its previous outlook was for revenue growth between 7% and 9%.
The airline also said it anticipated first-quarter earnings per share in a range of 30 cents to 50 cents. The company’s prior guidance was for earnings per share between 70 cents and $1.
In January, Delta released fourth-quarter results that topped Wall Street’s profit and revenue estimates, as the company benefited from strong demand during the crucial holiday period.
But things have taken a turn since then with many consumers worried about tariffs, inflation and a possible recession.
Bastian said Delta foresees June quarter profitability of $1.5 to $2 billion but is pausing on giving an updated full-year outlook “given the lack of economic clarity.”