Delta's stock takes a hit as revenue missed expectations in wake of shutdown

By Claudia Assis and Tomi Kilgore

Profit falls but tops expectations, while full-year revenue rises to a record amid growing demand for premium products

A Delta jet takes off from Los Angeles International Airport. Delta had called for an about $200 million hit related to the U.S. government shutdown.

Delta Air Lines on Tuesday reported holiday-quarter profit that beat expectations and record full-year revenue, sidestepping a temporary knock on air-travel demand thanks to the U.S. government shutdown.

But the air carrier's stock (DAL) fell as adjusted revenue for the final quarter of the year came up a bit short of forecasts.

Net income rose to $1.22 billion from $843 million in the same period a year ago, while adjusted earnings per share, which excludes nonrecurring items, declined to $1.55 from $1.85.

Operating revenue grew 2.9% to $16 billion, while adjusted revenue rose 1.2% to $14.61 billion.

Analysts polled by FactSet expected the airline to report adjusted EPS of $1.53 on adjusted sales of $14.68 billion.

The stock dropped 5.7% in premarket trading, but recovered some ground in the regular session.

The results were "a strong outcome" in a "very challenging" quarter with the government shutdown and flight restrictions, analysts at Deutsche Bank said.

Wall Street had trimmed its quarterly expectations over the past few months for Delta and other air carriers because of the U.S. government shutdown. At the end of October, the FactSet EPS consensus was $1.75 and the revenue consensus was $14.92 billion.

For the full year, revenue adjusted revenue rose 2.3% to a record 58.3 billion.

"High-margin, diversified revenue streams grew high-single digits over prior year and reached 60% of total revenue, reflecting the power of Delta's brand, growing demand for our premium products and the success of our integrated commercial and customer strategy," said Delta President Glen Hauenstein.

Looking ahead, the company expects first-quarter EPS of 50 cents to 90 cents, which surrounds the current FactSet consensus of 72 cents.

Delta said last month that U.S. government shutdown-related flight cancellations and cooling demand right before Thanksgiving would cost it about $200 million in the fourth quarter.

The news lifted the stock at the time, as Wall Street seemed relieved the fallout from the shutdown hadn't been more severe. Delta also said that its December demand had remained healthy and was trending up for early 2026.

Delta Chief Executive Ed Bastian was a vocal critic of the shutdown's effects on air travel, saying that airlines were used as a "political football" amid the funding impasse in Washington, which lasted 43 days and became the longest shutdown in history.

Airlines lost booking momentum when some customers turned skittish and made other plans ahead of the Thanksgiving holiday as the shutdown wore on. In early November, the Trump administration imposed flight cuts at major U.S. airports, citing safety concerns around staff shortages.

Air-traffic controllers, classified as essential personnel, worked through the funding impasse with deferred pay until the end of the shutdown. Staffing shortages, however, had triggered flight delays and cancellations even before the flight cuts took effect.

There's a "constructive fundamental backdrop" this year for airlines, analysts at BofA Securities said in a recent note. Positive industry trends include better demand and "easy comparisons" from macroeconomic volatility in the first half of last year.

Delta's shares have gained about 9% in the past 12 months through Monday, lagging a 20% gain for the S&P 500 index SPX in the same period.

-Claudia Assis -Tomi Kilgore

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01-13-26 1031ET