Delta cuts 2026 EPS guidance to $5.10–$5.60 after fuel bill jumps 69%

Delta Air Lines cut its full-year 2026 earnings guidance to $5.10–$5.60 per share on Friday after third-quarter fuel costs surged 69% year-over-year.

Shares of Delta (NYSE: DAL) slid more than 3% in morning trading as the Atlanta-based carrier posted Q3 results that missed both top and bottom lines. Revenue climbed 16% to $17.59 billion from $15.20 billion a year earlier, short of the $17.67 billion consensus cited by CNBC. Adjusted earnings per share landed at $1.72, three cents below the $1.75 forecast.

Net income told the sharper story. Delta reported $1.15 billion, down 47% from $2.17 billion in the same quarter last year.

What's driving the fuel spike?

Delta's fuel bill jumped to $4.35 billion in Q3, a 69% increase year-over-year. The average price per gallon rose 68% to $3.80, tracking an Iran war-aggravated crude market that has lifted margins at integrated majors including ExxonMobil and Chevron, per Fast Company.

CEO Ed Bastian framed the hit as a stress test the company has prepared for. "Our resilience reflects the structural durability we've built over many years, enabling us to effectively navigate one of the most elevated fuel environments in recent times," Bastian said in the release. "The foundation of that resilience is our people, whose commitment to delivering for our customers continues to set Delta apart."

On the call, Bastian pointed to hedges, capacity discipline and premium-cabin mix as the three pillars holding the P&L together. He announced no new ticket surcharges, but said the carrier will lean harder on revenue from loyalty and cargo to offset fuel.

Takeaway: at $4.35 billion, fuel now absorbs roughly 25 cents of every revenue dollar Delta books, up from about 17 cents a year ago.

Why is demand still described as "strong"?

Bastian added: "Demand remains strong, supported by consumers' growing preference for experiences and travel, with air travel continuing to be one of the best values in the consumer economy." The carrier continues to see full planes, but the new EPS range and the trimmed cash-flow forecast show fares alone won't fully offset the fuel surge.

Delta also cut its 2026 free cash flow target to roughly $2.5 billion, down from the prior $3 billion to $4 billion band. That trims the cushion for buybacks and debt reduction this fiscal year.

The reset puts Delta's 2026 EPS ceiling ($5.60) about 25% below the prior floor ($6.50). For context, Delta posted full-year 2025 adjusted EPS near the high end of its prior guidance.

How does Delta stack up against the Big Four?

Year-to-date through Thursday's close, Delta's stock is up 18.94%, the best performance among the four largest U.S. carriers. Peers trail by wide margins:

• United Airlines Holdings (Nasdaq: UAL): down 4.93% YTD
• American Airlines Group (Nasdaq: AAL): down 17.31% YTD
• Southwest Airlines (NYSE: LUV): roughly flat

Friday's pullback narrows the 2026 lead, but the gap over American Airlines still sits above 36 percentage points. United, the closest competitor, is now more than 23 percentage points behind Delta for the year.

Takeaway: even after Friday's drop, Delta's 2026 total return still beats every Big Four rival by double digits.

The Iran war-aggravated fuel regime will decide whether that lead holds into year-end, and whether Bastian's "structural durability" claim shows up in the Q4 numbers.