Delta Air Lines (DAL) Earnings Effect
Tight Range Ahead of Thursday’s Earnings Release
Delta Air Lines is set to release its second-quarter (Q2) fiscal 2025 earnings on Thursday, July 10, 2025, before the market opens.
In this post, we’ll take a closer look at how DAL shares have reacted to recent earnings releases—specifically, the “earnings effect” (earnings volatility) observed after
Q1 2025,
Q4 2024, and
Q3 2024.
These periods represent the company's financial performance from January 1 to March 31, 2025 (Q1 2025), October 1 to December 31, 2024 (Q4 2024), and July 1 to September 30, 2024 (Q3 2024).
By analyzing these past patterns, we aim to provide valuable insights for investors and event-driven traders ahead of this quarter’s results.
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For our analysis, we’ll focus on the three most recent earnings releases. Specifically, we’ll examine stock performance over a one-month window—spanning two weeks before and two weeks after each earnings date. This approach allows us to capture both the anticipation leading up to the announcement and the market’s reaction in the weeks that follow.
Please note that our analysis utilizes the classical Post-Earnings Announcement Drift (PEAD) methodology, calculated from the closing price on the day prior to the earnings release (T-1) and without the use of a benchmark. As a result, cumulative abnormal returns (CARs) are not considered in this approach. We believe this method is better suited to periods of heightened market uncertainty.
First, below you’ll find Chart 1, which highlights stock prices on various dates before and after the earnings release. The percentage values are calculated relative to T=0, which represents the earnings date. For example, at T-10 (10 trading days before the release), the value is 8.58. This means the stock price was 8.58% higher compared to its level on the earnings date (T=0).
Chart 2 presents a comparison of the stock price from one day before the earnings release to one day, one week, and two weeks following the announcement.
The selection of these specific days is intentional. T-1 represents today, while T+1, T+5, and T+10 correspond to the expiration dates of the options positions we are establishing today.
Chart 2
Chart 3 presents the financial results for the most recent three quarters.
Delta reported a record profit for the Q4 2024 in January 2025, which significantly boosted market sentiment at the time. However, results for the Q1 2025 quarter, while solid, were flat compared to the same period in the previous year—a trend management attributed directly to slower economic growth.
In the first quarter of 2025, Delta reported operating revenue of $14.0 billion and operating income of $569 million, resulting in a 4% operating margin. Despite challenging conditions, the company maintained industry-leading profitability, demonstrating resilience and effective execution. Based on guidance provided in January 2025, Delta projected an earnings per share compound annual growth rate of nearly 10% over the next few years, with fiscal 2025 earnings expected to exceed $7.35 per share and free cash flow projected to surpass $4 billion—a 17% increase over the prior year, signaling strong financial health and cash generation capability.
The company’s decision to declare a quarterly dividend in April 2025, subsequently paid in June, was broadly interpreted as a sign of confidence in its cash flow stability.
For the full fiscal year 2024, Delta reported revenue of $61.64 billion, representing a 6.19% year-over-year increase and underscoring a continued post-pandemic rebound. Nevertheless, revenue growth has moderated in recent quarters due to macroeconomic challenges and slower global expansion. Net income for fiscal 2024 was $3.46 billion, down from $4.61 billion in 2023, despite higher operating income of $6 billion, suggesting margin pressures or increased costs below the operating profit line.
Delta’s competitive position is supported by a strong premium brand, service quality, and operational reliability, which have helped capture higher-margin travelers. The company’s international network, especially in premium segments, has shown resilience and outperformed domestic travel in early 2025. Cost discipline and capacity management continue to protect margins and cash flow leadership. Awards for operational performance and customer satisfaction further differentiate Delta in the marketplace. Strategic alliances expand global reach, and the company remains a market leader among U.S. legacy carriers, particularly in profitability and leverage metrics.
Despite these strengths, Delta and the broader industry face significant headwinds, including slower global economic growth, persistent trade tensions, regulatory risks related to emissions and environmental standards, elevated fuel prices, ongoing supply chain disruptions, and general macroeconomic uncertainty. Recent trends have also indicated weakening domestic travel demand, prompting industry-wide capacity adjustments. Delta has responded by reducing planned capacity growth to flat for the second half of 2025, aiming to protect pricing and profitability.
Key risks currently weighing on the stock include softening travel demand, high fuel costs, supply chain issues, trade tensions, and the absence of updated full-year guidance, which contributes to market uncertainty.
Chart 4 presents the EPS surprise factor for the past three earnings releases.
Chart 5 illustrates the smoothed surprise factor, aiming to enhance clarity in depicting underlying market trends
Charts 6 and 7 illustrate changes in volume indicators surrounding previous earnings releases.
This post is for informational and educational purposes only—not financial advice. It does not constitute an offer or solicitation to buy or sell any financial instruments. Use of this information is at your own risk, and the authors are not responsible for any resulting losses or damages. All investment decisions remain your responsibility.
The stock is poised to move decidedly higher on good news.