Delta's stock soars after a well-timed earnings report showed higher fuel costs weren't an issue

By Tomi Kilgore

Air carrier's oil refinery helped reduce the fuel price paid per gallon in Q1 by more than 2%, and will provide a $300 million benefit to Q2 expenses

Delta had better-than-expected earnings reported after the Iran cease-fire was announced.

Shares of Delta Air Lines (DAL) soared in early Wednesday trading, as the air carrier's first-quarter earnings report was well-timed with the Iran cease-fire, as a big boost to travel stocks was sparked by tumbling oil prices.

Even without the cease-fire, investors would have likely cheered Delta's results. The company's quick response to the spike in fuel costs through surcharges and higher fares, coupled with strong travel demand, led to profit and revenue that beat expectations and an upbeat outlook.

The fact that Delta has its own oil refinery also helped, as it helped reduce fuel costs by more than 2% per gallon. It is expected to provide a $300 million benefit in the current quarter.

The stock shot up 12.5% in premarket trading, putting it on track for its biggest gain since it rallied 23.4% on April 9, 2025, when markets recovered from President Donald Trump's "liberation day" tariff announcements.

The U.S. Global Jets ETF JETS powered up 8.9%, also toward its best day since last year. Among Delta's closest peers, American Airlines Group's stock (AAL) climbed 9.6% and United Airlines Holdings shares (UAL) ascended 10.9%.

Crude oil futures (CL.1) plunged 16.5% in recent trading, toward its biggest one-day drop in six years.

Delta reported total revenue for the quarter to March 31 that rose 12.9% from a year ago to $15.85 billion, which was well above the average analyst estimate compiled by FactSet of $15.03 billion.

For the current second quarter, the company expects total revenue growth in the "low-teens" percentage range, while the current FactSet revenue consensus of $17.21 billion implies an 11% rise.

"Demand remains strong, and we are taking actions to protect our margins and cash flow," said CEO Ed Bastian. "This includes meaningfully reducing capacity growth, with a downward bias until the fuel environment improves, and moving quickly to recapture higher fuel costs."

The company's chief commercial officer, Joe Esposito, had said at a broker conference in mid-March that fuel surcharges on international flights had already "gone in," while base fares for domestic flights had also gone up. And on Monday, Delta announced increases in checked-bag fees, following moves by rivals earlier this month.

The company swung to a net loss of $289 million from net income of $240 million a year ago. But adjusted earnings per share, which excludes nonrecurring items, such as market-to-market adjustments on investments and settlements on fuel hedges, rose to 64 cents from 45 cents, and beat the FactSet consensus of 58 cents.

Adjusted fuel expenses for the quarter were up 8.2% to $2.59 billion, while the average fuel price paid per gallon increased 6.9% to $2.62. The refinery helped reduce the price per gallon by 6 cents.

Delta's stock was already an outlier before Wednesday's rally, as it had gained 1.3% in March despite surging oil prices, while the Jets ETF had tumbled 13.4%, as its oil refinery helped make it a defensive play for the sector.

So far this year, Delta's stock has lost 5.5%, while the Jets ETF has shed 11.7% and the S&P 500 index SPX has declined 3.3%.

-Tomi Kilgore

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04-08-26 0740ET