Delta (DAL) Earnings Tuesday: Risks, Upside Levers, What to Watch
Delta (DAL) Earnings Tuesday: Risks, Upside Levers, What to Watch
By:Gus Downing
Delta Airlines (DAL) reports their Q4 2025 earnings Tuesday, January 13, before market open
Analyst consensus estimates call for an earnings per share (EPS) of $1.53 on revenue of $14.7 billion.
These estimates are both down from the previous quarter, where DAL reported earnings of $2.17 per share and $15.2 billion in revenue.
Outside of core EPS and revenue numbers, the defining factors for DAL headed into this report are unit revenue and demand mix, costs and margins, 2026 guidance, loyalty economics and American Express, and operational comps.
PRASM Sets the Tone
Unit revenue and demand mix will be one of the most critical pieces, particularly as they pertain to the company’s Q4 guidance issued in Q3’s earnings call. Passenger Revenue per Airline Seat Mile, commonly referred to as PRASM, is often the biggest variable for airline revenue, and Delta is no exception. Q3’s report called for 2-4% growth in PRASM and total unit revenue into this quarter; meeting or exceeding that guidance would act as a bullish variable, while a miss would work against share price.
Additionally, investors will be eager to hear what guidance management gives regarding early Q1 trends, particularly as they pertain to domestic vs. transatlantic revenue, and corporate vs. discretionary revenue.
Margin Guardrails vs. Reality
Costs and margins will also obviously be very relevant; particularly Cost per Airline Seat Mile, commonly referred to as CASM. Q3’s report called for 10.5-12% margins in Q4, and CASM trajectory relative to that guidance has the propensity to move shares. Any further information on fuel costs and contributions or headwinds from Monroe Energy would also fit into this category, and could influence changes in share price.
SkyMiles + Amex: The Cushion
A niche but impactful part of Delta’s operations are loyalty economics and American Express; trends in co-brand remuneration and SkyMiles engagement could shed some light on what could be in store for 2026, especially if leisure normalizes. In their Q3 2025 report, management highlighted loyalty as a key driver, and if that loyalty holds strong or increases, higher revenues should result.
Capex, Debt, and the Path Ahead
Lastly, 2026 guidance will also be a major player. FY2025 targeted a total EPS of $6; a goal which would take $1.73 in Q4 EPS to achieve. Any updates regarding EPS targets for FY2026 or updated free cash flow targets (which were at $3.5-4.0 billion in 2025) could be impactful. Also look out for early framing on 2026 capex, capacity, and leverage, as Delta ended Q3 2025 with $14.9 billion in total debt.
Gus Downing is host of the tastylive Network show Risk and Reward. @GainsByGus
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