The airline’s FY24 performance was officially the best in its 100-year history
Delta Air Lines (NYSE:DAL) stock soared 8% in premarket trading on Friday morning following robust quarterly results and optimistic forward guidance.
Delta generated revenue of $15.56 billion for Q4 2024 (ending in December), beating analysts’ consensus estimate of $14.99 billion. Furthermore, the airline carrier reported adjusted earnings of $1.85 per share, while Wall Street had only anticipated earnings of $1.76 per share.
For the full year 2024, the airline posted operating revenue of $57.0 billion, up 4.3% from 2023. It also recorded adjusted earnings of $6.16 per share and free cash flow of $3.4 billion for 2024.
Moreover, Delta Air Lines guided for earnings exceeding $7.35 per share in 2025. This would be the highest earnings per share (EPS) in Delta’s century-long history. It also would surpass the analysts’ consensus prediction of $7.22 per share.
Delta Air Lines CEO Ed Bastian sounded confident in his forward-looking commentary. “As we move into 2025, we expect strong demand for travel to continue, with consumers increasingly seeking the premium products and experiences that Delta provides,” he said.
Bastian also noted that the firm’s FY24 performance was officially the best in its 100-year history.
Analysis: No easy flight for Delta
Delta’s chief executive has every right to brag about the airline’s performance since it beat the experts’ forecasts. Owing to Bastian’s confident remarks and Delta’s optimistic guidance, it’s easy to see why DAL stock flew higher this morning.
Now, however, Delta has the daunting challenge of meeting its own expectations. Will consumers increasingly seek “premium products” as Bastian believes they will?
First-class travel and various in-flight amenities can be quite pricey, of course. Predicting whether the U.S. and global economies will be strong enough to accommodate luxury travel spending in 2025 is difficult.
Friday’s stock traders are clearly on board with Bastain’s enthusiastic vision for 2025. Yet, the buyers may run out of fuel soon, as Delta stock has already risen more than 50% in the past year.
Hence, if this momentum continues, U.S. consumers in general and Delta Air Lines’ customers in particular will need to be strong this year. Otherwise, DAL stock may be grounded after the post-earnings excitement wears off.
