Delta stock soars 12.5% as refinery blunts fuel costs
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- Delta Air Lines reported Q1 revenue of $15.85 billion, up 12.9% year-over-year and well above the FactSet consensus of $15.03 billion, with adjusted EPS of 64 cents beating the 58-cent estimate.
- Delta's Monroe oil refinery reduced the company's average fuel price per gallon by 6 cents (more than 2%) in Q1, and is projected to deliver a $300 million benefit to Q2 fuel expenses.
- Delta's stock jumped 12.5% in premarket trading — on track for its biggest one-day gain since April 9, 2025, when markets recovered from President Trump's 'liberation day' tariff announcements.
- The Iran cease-fire sent crude oil futures plunging 16.5% toward their biggest one-day drop in six years, giving a tailwind to the entire airline sector.
- Peer airlines rallied alongside Delta: American Airlines gained 9.6%, United Airlines climbed 10.9%, and the U.S. Global Jets ETF rose 8.9% premarket.
- CEO Ed Bastian said Delta is 'meaningfully reducing capacity growth, with a downward bias until the fuel environment improves' while moving to recapture higher fuel costs through surcharges and fare increases.
- Despite the beat, Delta swung to a net loss of $289 million in Q1, compared to net income of $240 million a year earlier, due to nonrecurring items like fuel hedge settlements.
Why it matters: Delta's oil refinery — frequently dismissed as a quirky sideshow — functioned as a structural hedge that saved the airline roughly 6 cents per gallon in Q1 even as competitors absorbed the full fuel spike, leaving Delta as the only major U.S. carrier to gain ground in March. With Q2 guidance pointing to low-teens revenue growth and a $300 million refinery benefit still ahead, the print showed Delta can out-earn rivals during a fuel shock.
