Delta Stock Falls 5% Despite Q4 Beat as Premium Strategy Powers Record Year
January 13, 2026 · by Fintool Agent
Delta Air Lines-2.70% beat fourth-quarter earnings expectations but saw its stock tumble nearly 5% Tuesday as investors fixated on a 2026 profit forecast that fell short of Wall Street's expectations—highlighting the tension between the airline's record operational performance and the market's demand for accelerating growth.
The Atlanta-based carrier reported adjusted EPS of $1.55, narrowly topping the $1.54 consensus estimate, on record revenue of $16.0 billion. But Delta's full-year 2026 EPS guidance of $6.50 to $7.50—with a midpoint of $7.00—disappointed analysts expecting $7.25.
"The Delta team delivered a strong close to our Centennial year, demonstrating the differentiation and durability we've built," said CEO Ed Bastian. "We generated $5 billion of pre-tax profit with a double-digit operating margin and record free cash flow of $4.6 billion."
The Premium Pivot Is Working
The real story beneath the surface isn't the guidance miss—it's the structural transformation of Delta's business model. Premium and diversified revenue streams now account for 60% of total revenue, up from roughly 40% before the pandemic.
The divergence between Delta's premium and economy businesses was stark in Q4:
| Revenue Category | Q4 2025 | Change YoY |
|---|---|---|
| Premium Ticket Revenue | $5.7B | +9% |
| Main Cabin Ticket Revenue | $5.6B | -7% |
| Loyalty Travel Awards | $1.1B | +5% |
| American Express Remuneration | $8.2B (full year) | +11% |
"Delta generated record revenue of $58.3 billion while sustaining a unit revenue premium relative to the industry of nearly 115 percent," said President Glen Hauenstein. "High-margin, diversified revenue streams grew high-single digits over prior year."
Ask Fintool AI AgentThe American Express Money Machine
The American Express-0.54% partnership continues to be a crown jewel in Delta's diversification strategy. Co-brand remuneration grew 11% to $8.2 billion in 2025, driven by double-digit growth in co-brand spend every quarter. Delta acquired more than 1 million new cardholders for the fourth consecutive year.
This partnership is increasingly central to Delta's financial health—$8.2 billion represents roughly 14% of Delta's total revenue, with significantly higher margins than selling airline seats.
Boeing Order Signals Long-Haul Ambitions
Delta announced its first direct order for Boeing+3.09% 787 Dreamliners—30 of the 787-10 variant with options for 30 more. Deliveries begin in 2031. The 787-10 can carry up to 336 passengers with 25% lower fuel consumption than the aircraft it replaces.
"Delta is building the fleet for the future, enhancing the customer experience, driving operational improvements and providing steady replacements for less efficient, older aircraft in the decade to come," Bastian said.
The order brings Delta's firm order book to 130 Boeing aircraft, including the previously announced 100 737-10 jets. Delta also selected Ge Aerospace's+0.87% GEnx engines for the new widebodies, continuing a relationship that began in 1956.
Ask Fintool AI AgentFinancials at a Glance
| Metric | Q4 2025 | Q4 2024 | Change |
|---|---|---|---|
| Revenue | $16.0B | $15.6B | +3% |
| Operating Income | $1.5B | $1.7B | -15% |
| Net Income | $1.2B | $843M | +45% |
| Adj. EPS | $1.55 | $1.85 | -16% |
| Operating Margin | 10.1% | 12.0% | -190 bps |
| Free Cash Flow (FY) | $4.6B | N/A | Record |
The quarter was impacted by the longest U.S. government shutdown on record, which disrupted tens of thousands of flights and cost Delta approximately $200 million in lost profit.
Full-year 2025 highlights:
- Revenue: $63.4 billion (GAAP) / $58.3 billion (adjusted)
- Operating margin: 10.0% (adjusted)
- Return on invested capital: 12.0%
- Adjusted net debt reduced by $3.7 billion to $14.3 billion
Stock Performance vs. Peers
Delta's stock fell to $69.68 at market close, dragging peers United Airlines-0.51% and American Airlines-3.16% down 3% each.
Despite today's sell-off, Delta shares are up 18% over the past year—outperforming American (-7.5%) but trailing United (+21%) and Southwest (+32%).
2026 Outlook: Premium-Focused Growth
Delta's guidance for 2026:
| Metric | 2026 Guidance |
|---|---|
| EPS | $6.50 - $7.50 (20% growth at midpoint) |
| Free Cash Flow | $3B - $4B |
| Gross Leverage | 2x |
| Capacity Growth | 3% |
| Q1 Revenue Growth | +5% to +7% |
| Q1 EPS | $0.50 - $0.90 |
"2026 is off to a strong start with top-line growth accelerating on consumer and corporate demand," Bastian said. "Since the start of this year, cash sales trends have accelerated on top of last year's strong performance, with momentum across the booking curve and all geographies."
Corporate travel is also rebounding—up high-single digits in Q4 across all sectors, with nearly 90% of surveyed companies expecting travel volume to increase or remain steady in 2026.
What to Watch
Catalysts:
- Q1 2026 earnings (April): Will premium momentum continue to offset main cabin weakness?
- American Express partnership renewal discussions
- Boeing 737 MAX delivery timeline and 787-10 production schedule
- World Cup 2026 impact on international demand
Risks:
- Economy cabin demand remains muted despite overall travel strength
- Geopolitical uncertainty weighing on corporate travel budgets
- Fuel price volatility (though Delta's refinery provides some hedge)
- Credit card rate cap proposal from Trump could impact bank partners
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