Delta Air cuts profit forecast as $6-billion fuel-cost surge outweighs fare gains — SkimNews
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- Delta Air Lines cut its 2026 adjusted earnings forecast to $5.10-$5.60 per share from the prior $6.50-$7.50, with the new $5.35 midpoint falling below the $5.46 LSEG analyst average
- Delta raised its projected fuel-cost increase for 2026 by $2 billion to $6 billion, explicitly blaming the Iran war for jet fuel prices; CFO Erik Snell told reporters "all of it's fuel"
- Delta's Q3 fuel expenses jumped 62% year-over-year to $4.1 billion, exceeding its July forecast by more than $500 million, while Q3 adjusted earnings of $1.72/share narrowly missed the $1.76 analyst estimate
- Delta's shares fell 2.5% in premarket trading; the carrier is the first major global airline to report Q3 results, with United, American and Southwest due later this month
- Delta's owned Monroe refinery outside Philadelphia is projected to generate $700 million in profit this year, offering a partial cushion against fuel spikes that no competitor gets
- Third Bridge analyst Liam Dorsey said the revenue outlook is "held up by the premium passenger and higher fares," with demand still intact despite U.S. airline fares rising roughly 25% year-over-year in the five months through August
- Deutsche Bank analysts expect the industry to recover a smaller share of higher fuel costs through fares in Q4, with full recovery not anticipated until early 2027, while Ryanair CEO Michael O'Leary warned European airlines face more than another year of elevated fuel costs
Why it matters: Delta's newly cut $5.35 midpoint falling below the $5.46 Street estimate sets a soft bar for United, American, and Southwest reporting later this month. Despite $700M in Monroe refinery profit cushioning roughly 40 cents a gallon, Q4 fuel still rises to $4.25/gallon from $3.61 — and Deutsche Bank says full fare-driven recovery won't come until early 2027.
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