Delta outlook tops estimates as CEO expects 2025 to be airline's ‘best financial year in our history'

• Delta forecast first-quarter earnings per share of between 70 cents and $1, slightly higher than analysts' estimates.
• Delta beat sales and earnings estimates for the last three months of the year.
• The carrier is the first of the major U.S. airlines to report results.

Delta Air Lines' first-quarter outlook on Friday topped analyst expectations as the carrier forecast strong travel demand to start the year, which CEO Ed Bastian said will likely be the carrier's best ever.

Delta said it expects to generate more than $4 billion in free cash this year, up 18% from 2024 and in the midpoint of its annual target of between $3 billion and $5 billion. For the full year, it expects annual adjusted earnings more than of $7.35 per share.

"We feel quite good coming into the new year," Bastian told CNBC. "Everywhere, we see consumers continue to prioritize experience over goods."

That is setting up Delta for "our best financial year in our history," Bastian added.

Here's how the company performed in the three months ended Dec. 31 compared with Wall Street expectations based on consensus estimates from LSEG:

• Earnings per share: $1.85 adjusted vs. $1.75 expected
• Revenue: $14.44 billion adjusted vs. $14.18 billion expected

Delta said it expects revenue to rise 7% to 9%, ahead of the roughly 5% growth analysts polled by LSEG had forecast. The carrier expects first-quarter earnings per share of between 70 cents and $1, slightly ahead of Wall Street predictions of between 65 cents and 97 cents.

The Atlanta-based airline is the first major U.S. carrier to report earnings this quarter. Airlines have enjoyed strong post-pandemic travel demand, which analysts said is likely to continue this year, with a few deals along the way for consumers.

Delta has said it's been capitalizing on a boom in premium travel as more customers shell out for roomier seats or rewards credit cards.

Delta shares were up more than 9% in morning trading. Airline stocks have rallied in recent months. Shares in Delta's chief rival, United Airlines, gained more than 130% over the past 12 months through Thursday's close. Delta shares are up more than 45% in that period. 

Delta's American Express partnership brought in $2 billion in the fourth quarter, up 14% from the year-earlier period. Revenue from premium seats, such as first class and premium economy, rose 8% in the fourth quarter to $5.2 billion compared with a 2% rise in main cabin ticket revenue to about $6 billion.

Unit revenue, a measure of how much revenue an airline is bringing in for how much it flies, rose 4% in the fourth quarter from 2023.

Delta's profit fell 59% to $843 million in the last three months of the year from the same period of 2023 as expenses, including payroll, rose 7% or $942 million. Revenue rose 9% to $15.6 billion from a year earlier.

Adjusting for one-time items, Delta posted per-share earnings of $1.85 in the fourth quarter, on adjusted revenue of $14.44 billion, both ahead of analysts' estimates.

Correction: Delta expects first-quarter earnings per share of between 70 cents and $1. An earlier version mischaracterized the figures.