Delta Earnings Lift Airline Stocks. Why It May Be a Premature Celebration.

Delta Air Lines stock has jumped close to 50% since hitting its 2025 low in April. (Photograph by Mario Tama/Getty Images)

Delta Air Lines and other airline stocks were surging on Thursday after the carrier topped Wall Street’s earnings expectations and restored its full-year guidance.

The reinstated outlook injected some much-needed confidence into the broader sector. United Airlines rose 11%, American Airlines climbed 9%, Southwest Airlines was up 5% and JetBlue Airways surged 7%.

But as Delta’s robust revenue from premium travel was a key factor in its well-received earnings, other carriers reliant on more price-conscious consumers—such as JetBlue or Southwest—may find it harder to live up to the optimism later in earnings season.

Delta posted adjusted earnings per share (EPS) of $2.10 on revenue of $15.5 billion. Analysts were expecting second-quarter adjusted EPS of $2.06 from revenue of $15.5 billion, according to FactSet data.

The stock rose 13% to $57.15 in early trading.

The U.S. airline withdrew its full-year guidance when it reported first-quarter earnings in April, just days after President Donald Trump unveiled widespread tariffs on countries around the world.

It restored guidance Thursday, now expecting EPS of between $5.25 and $6.25. That is lower than its January outlook of greater than $7.35 but better than Wall Street’s estimate of $5.38.

Plus, the reintroduction of guidance is a signal that the uncertainty surrounding travel demand has lifted and the Delta has more confidence in what’s ahead.

“We came away reassured by Delta’s guidance and expect its shares to trade higher today as well as those of the broader peer group,” TD Cowen analyst Tom Fitzgerald said, maintaining a Buy rating on the stock.

Delta’s earnings revealed some good news when it comes to travel demand, particularly in the premium segment.

“Through the quarter, demand trends stabilized at levels that are flat to last year and we continued to see resilience in our diverse, high-margin revenue streams,” Delta’s president Glen Hauenstein said.

Premium travel was a highlight, in contrast with softening demand for tickets in the main cabin. Premium revenue grew 5% year-over-year in the second quarter, while main cabin revenue fell 5%. International revenue also climbed 2% in the quarter, suggesting positive signs for the peak summer travel period.

Corporate demand also remains steady, Delta said, up by low-single digits over the previous year.

But Fitzgerald warned the breakdown of Delta’s revenue meant the carrier’s earnings may not guarantee similar success for all carriers. “We would hesitate on overextrapolating the guidance for airlines without premium/diverse revenues,” he added.

Airline stocks have had a turbulent year but things were looking much worse just three months ago. Delta’s shares are down 16% this year, through Wednesday’s close, but have climbed about 47% since hitting their 2025 lows in April. United Airlines is down 17% in 2025 and American Airlines has fallen 34%, while Southwest Airlines is up 2.7%.

Thursday’s price action looks set to get the Delta back closer to positive territory for the year—which would be quite the turnaround.

Write to Callum Keown at callum.keown@dowjones.com