Delta Air Lines Inc. ( DAL ) stock rose following the release of its third-quarter 2025 earnings, as the company exceeded expectations for both adjusted EPS and revenue.

The airline posted operating revenue of $16.7 billion, marking a 6% year-over-year increase. GAAP EPS came in at $2.17, a 10% rise from the previous year, while adjusted EPS was $1.71, surpassing the consensus estimate of $1.52. Following the strong results, shares climbed in the wake of the report.

Passenger revenue increased by 3% year-over-year, driven by a 9% rise in premium products and a 13% jump in loyalty travel awards. The airline also experienced a significant increase in ancillary revenue, which rose by 59% compared to the same period last year.

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Adjusted operating income for the quarter was $1.7 billion, with a solid operating margin of 11.2%.

Delta’s diverse, high-margin revenue streams, which now account for 60% of total operating revenue, were key drivers behind the strong performance. The airline’s continued focus on customer loyalty and premium services contributed significantly to its revenue growth.

Delta Air Lines Inc. ( DAL ) reported operating cash flow of $1.8 billion for the third quarter of 2025, up 42% from the same period last year. Free cash flow surged to $833 million, compared to just $95 million in the third quarter of 2024.

The airline has made significant progress in improving its cash generation capabilities, as reflected in its ongoing debt reduction efforts. Total debt and finance lease obligations dropped by 16%, ending the quarter at $14.9 billion.

The airline’s non-fuel unit costs (CASM-Ex) rose by 0.3%, indicating a modest increase in operational expenses. However, Delta’s ability to maintain relatively flat non-fuel operating costs while simultaneously improving its revenue performance underscores the company’s operational efficiency.

The adjusted fuel price was $2.25 per gallon, marking an 11% decrease compared to the previous year, with a refinery benefit of 5 cents per gallon.

Operating expenses totaled $15.0 billion, while adjusted operating expenses were $13.5 billion.

Outlook

Delta expects total revenue growth of 2% to 4% for the December quarter, with adjusted EPS projected between $1.60 and $1.90. The airline anticipates an operating margin between 10.5% and 12%.

For the full year, Delta has narrowed its adjusted EPS guidance to $6.00, near the upper end of its previous forecast of $5.25–$6.25, aligning with analysts’ expectations of $5.76.

The company also projects free cash flow for the year to range from $3.5 billion to $4 billion, in line with long-term targets.

Delta remains focused on debt reduction, targeting a gross leverage ratio of less than 2.5x, further strengthening its balance sheet and capital return strategy.

The stock’s positive momentum is evident from recent performance: shares rose 9% in January, 23.4% in April, and an additional 12% in the subsequent quarter, driven by strong earnings and guidance. However, concerns about the main cabin economy segment have led to some stock fluctuations.

Price Action: DAL shares were trading higher by 6.93% to $61.08 premarket at last check Thursday.

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