Delta Air Lines reported on October 9, before the market opened, for the September quarter - the company's name for the third quarter. Adjusted revenue: $17.6 billion, up 16%, and adjusted earnings: $1.72 a share, up 1.2%. Revenue was a record for a September quarter, but the fuel price rose 60%, GAAP earnings fell 47%, and the company cut its earnings guidance for the full year.
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What was reported
| September quarter 2026 | September quarter 2025 | Change | |
|---|---|---|---|
| Adjusted revenue | 17,585 | 15,197 | +16% |
| Revenue (GAAP) | 20,186 | 16,673 | +21% |
| Ticket revenue - premium | 6,818 | 5,796 | +18% |
| Ticket revenue - main cabin | 6,802 | 6,063 | +12% |
| Loyalty revenue* | 2,648 | 2,237 | +18% |
| Adjusted unit revenue (TRASM, cents) | 22.18 | 19.22 | +15% |
| Unit cost excluding fuel (CASM-Ex, cents) | 14.03 | 13.08 | +7% |
| Adjusted fuel price per gallon (dollars) | 3.61 | 2.25 | +60% |
| Adjusted fuel expense | 4,143 | 2,565 | +62% |
| Adjusted operating income | 1,662 | 1,688 | -1.5% |
| Adjusted operating margin | 9.4% | 11.1% | -1.7 pts |
| Adjusted pre-tax income | 1,497 | 1,477 | +1.4% |
| Adjusted earnings per share (dollars) | 1.72 | 1.70 | +1.2% |
| Earnings per share, GAAP (dollars) | 1.15 | 2.17 | -47% |
| Free cash flow | 463 | 833 | -44% |
In millions of dollars, except per-unit figures, price per gallon and earnings per share. "Adjusted" follows Delta's definition: excluding third-party refinery sales, mark-to-market on investments, and mark-to-market and settlements on hedges. The row marked with an asterisk is not a single line in the release: it is the sum of two loyalty revenue lines in the tables. Source: Delta's earnings release (Form 8-K), October 9, 2026.
Revenue: premium, main cabin and loyalty
Adjusted unit revenue rose 15%, to 22.18 cents, while capacity barely moved. Available seat miles (ASM) rose only 0.3%, to 79,288 million, and the load factor stayed at 86%, as it was a year ago. In other words, almost all of the revenue growth came from price and mix rather than volume. According to the release, this is an improvement of three percentage points from the June quarter.
Premium ticket revenue rose 18%, to $6,818 million, and main cabin revenue rose 12%, to $6,802 million. A year ago the ratio ran the other way: $5,796 million in premium versus $6,063 million in main cabin. Premium seats rose 6%, while main cabin seats fell by a low single-digit percentage, and unit revenue in the main cabin rose 17%.
Loyalty grew at a similar pace. Loyalty travel awards brought in $1,302 million, up 17.5%, and loyalty and related revenue brought in $1,346 million, up 19.2%. Remuneration from American Express rose 15%, to about $2.3 billion in the quarter, and reached $6.9 billion in the first nine months, up 14%. The company expects remuneration for the full year to exceed $9 billion. What the company defines as diverse revenue streams made up 61% of adjusted revenue.
Fuel and costs
The adjusted fuel price per gallon rose 60%, to $3.61, versus $2.25 a year ago. On a GAAP basis the price was $3.80 versus $2.26, up 68%. The adjusted price includes a benefit of 13 cents a gallon from the company's refinery. The volume of fuel barely changed - 1,146 million gallons, versus 1,138 million - so adjusted fuel expense rose 62%, to $4,143 million from $2,565 million, and reached about a quarter of adjusted operating expenses.
The backdrop is high energy prices since the war in Iran began in February. According to CNBC, citing FactSet data, jet fuel on the US Gulf Coast rose to $4.34 a gallon on October 8, versus $2.19 a year earlier, and Brent settled that day at $104.28 a barrel.
Fuel alone added about $1.6 billion to expenses, against growth of about $2.4 billion in adjusted revenue: 4,143 less 2,565, versus 17,585 less 15,197. About two-thirds of the increase in adjusted revenue was absorbed by fuel. The other costs offered no relief either: unit cost excluding fuel rose 7.3%, to 14.03 cents, and adjusted non-fuel cost reached $11,125 million, up 7.6%. According to the report, summer storms cost nearly one point of capacity and nearly one point of unit cost.
The result: adjusted operating income fell 1.5%, to $1,662 million from $1,688 million, and the margin fell to 9.4% of adjusted revenue, from 11.1% a year ago. Dividing the two figures in the table directly gives 9.45%. Adjusted pre-tax income rose 1.4%, to $1,497 million, a margin of 8.5% versus 9.7%. Adjusted net income was $1,134 million, up 1.8%.
Adjusted earnings versus GAAP earnings
GAAP earnings per share fell 47%, to $1.15 from $2.17, while adjusted earnings rose 1.2%. GAAP net income was $756 million, down 47%. GAAP pre-tax income was $1,074 million, versus $1,777 million a year ago, down 40%, a margin of 5.3% versus 10.7%. The GAAP tax rate was 29.6%, versus 20.3% a year ago.
The largest item in the gap is a loss of $218 million from marking investments to market, a non-operating item, versus a gain of $311 million in the same quarter a year ago. Next come hedge items (mark-to-market and settlements) of $208 million, recorded in fuel expense and stemming from inventory hedges at the Monroe refinery, and a gain of $2 million on debt extinguishment. GAAP revenue also includes $2,601 million of refinery sales to third parties, which are excluded from adjusted revenue.
The adjusted figures for the same quarter a year ago are shown as restated in the current release, following a change in 2026 in the timing of including the refinery's hedge settlements.
The refinery itself posted an operating loss of $33 million in the quarter, versus income of $53 million a year ago, after a temporary outage that began in mid-June. According to the 10-Q, operations returned to normal by the end of the quarter.
Cash flow, and the guidance that was cut
Free cash flow in the quarter was $463 million, down 44% from $833 million, and it stands at $1.9 billion since the start of the year. Operating cash flow fell 7.3%, to $1,713 million, and gross capital expenditure rose 26.5%, to $1,408 million. Adjusted net debt stood at $13,350 million, $950 million lower than at the end of 2025, and liquidity at $6.9 billion.
Full-year adjusted earnings guidance was cut to $5.10 to $5.60 a share, from $6.50 to $7.50 in July. The midpoint fell from $7.00 to $5.35, about 24%. The free cash flow guidance fell to about $2.5 billion, from $3 to $4 billion, and gross leverage is expected to be about 2.2, versus about 2 in the previous guidance. The company also expects to repay more than $2 billion of debt and to receive a benefit of more than $700 million from the refinery.
CEO Ed Bastian said in the release that the company expects a pre-tax profit of about $4.5 billion for the year, while absorbing a $6 billion increase in fuel costs. He presented the picture as strong demand across all cabins and all regions, with a significant part of the fuel increase passed through to fares - and still a lower guidance.
For the fourth quarter the company expects revenue to rise about 20%, while seats rise less than 2%, an operating margin of 7% to 9%, and adjusted earnings of $1.15 to $1.65 a share, versus $1.55 in the fourth quarter a year ago. The midpoint of the range, $1.40, is below the same quarter. The expected fuel price is about $4.25 a gallon, based on the forward curve of October 2, including a benefit of about 40 cents from the refinery.
Versus expectations, and the stock
According to CNBC, citing LSEG data, analysts expected adjusted earnings of $1.75 a share and adjusted revenue of $17.67 billion. The actual figures were $1.72 and $17.59 billion, slightly below expectations; according to CNBC, this is the first time in two years that Delta has missed earnings expectations. The fourth-quarter guidance was below analyst estimates, according to CNBC, with no figure given.
Against the company's own July guidance, too, the report is lower: adjusted earnings of $2.00 to $2.50 a share, an operating margin of 11% to 13%, and a fuel price of about $3.15 a gallon. The actuals: $1.72, 9.4% and $3.61. The gap in the fuel price, 46 cents a gallon over 1,146 million gallons, is worth more than $500 million.
The stock opened down 3.0% on the day of the report, at $79.68, fell during the session to a low of $79.16, and rose to a high of $82.37. It closed at $82.17, up 0.04%, versus $82.14 on the previous trading day. Trading volume was 11.93 million shares.
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דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What stands out to me in this report is the gap between the revenue line and the profit line. Adjusted revenue up 16% on capacity that barely moved, and adjusted operating income that fell. The difference is fuel: about two-thirds of the increase in revenue was absorbed by it.
There are two ways to read this. One, demand is strong - premium and loyalty are growing at double-digit rates, and even the main cabin yields 17% more per unit - and fuel is an external factor that the company is already passing through in part to fares. If it eases, the gap will close. Two, the company cut its full-year guidance despite record revenue, and the fourth-quarter guidance implies an operating margin of 7% to 9% and earnings per share whose midpoint is below last year's, even with revenue expected to rise 20%. Whoever reads it this way sees a price pass-through that arrives late and has a ceiling.
Both readings fit the same numbers, and the choice between them depends on a price I do not know how to forecast. The guidance itself is built on the forward curve of October 2, and the stock, which opened down 3% and finished unchanged, apparently has not decided yet.
(To be clear: this is my personal opinion only. Nothing here is a recommendation to take any action, and there is no forecast here of the price of any security.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
