Delta Air Lines Set for Growth with Strong Q4 Performance

Delta Air Lines remains on course for new highs in 2025, driven by robust Q4 results and positive guidance. The company's strong revenue growth and improving cash flows position it favorably in a recovering travel sector.

Date: 15-01-2025

AI Rating: 8

Performance Highlights
Delta Air Lines reported a record quarterly result, contributing to a record annual performance with total revenue at $15.56 billion, marking a nearly 9.5% year-over-year increase. Revenue from leisure and corporate markets has driven this success, supported by premium and loyalty spending.

Earnings and Cash Flow
The company also demonstrated strong earnings quality, achieving pre-tax earnings up roughly 30% and an operating cash flow of $1.8 billion. Delta's full-year free cash flow stood at $3.4 billion, supporting its positive outlook for 2025.

Guidance Expectations
For the upcoming first quarter, Delta anticipates revenue growth between 7% to 9%, surpassing analyst expectations. The earnings per share (EPS) is projected at a midpoint of $0.85, exceeding the analysts’ forecast of $0.77. For the entire year, EPS growth is expected to be greater than 10%, playing into overall positive investor sentiment.

Debt Management
Delta has successfully reduced its debt by $1.5 billion in Q4 alone, with total debt dropping approximately 20% year-over-year. This efforts not only improve the company's credit quality but also enhance its cash flow and capital return prospects, which are crucial factors affecting stock price positively including potential share buybacks and dividend increases.

Overall, the report highlights key metrics and trends that indicate Delta is on a solid growth trajectory, with increasing analyst coverage and price target revisions suggesting a favorable outlook for stock performance.

Stocks: DAL