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EARNINGS $POTLIGHT

We dissect the most significant company earnings of the week.

Delta Airlines Earnings

Delta Airlines Earnings

4/9/25, 11:00 AM

Delta Air Lines' upcoming earnings call is poised to be a critical moment for investors, as the company faces a confluence of economic and geopolitical headwinds. Having already pre-released a significantly lowered profit forecast, now anticipating earnings of $0.30-$0.50 per share, down from $0.70-$1.00, Delta has signaled a cautious outlook.


The primary concerns revolve around:

  • Macroeconomic Uncertainties: The broader economic climate, including potential recessionary pressures and fluctuating consumer spending, is expected to weigh heavily on travel demand.

  • Declining Travel Demand: Delta anticipates a potential slowdown in travel reflecting the aforementioned economic uncertainties.

  • International Tensions: The prospect of renewed travel bans under a potential Trump administration adds a layer of complexity, particularly for Delta's international operations which could face significant disruptions.

Therefore the earnings call will be closely watched for further insights into Delta's strategies for navigating these challenges, its updated projections for the coming quarters and its assessment of the potential impact of international policy changes. Investors will be particularly interested in how Delta plans to mitigate the effects of reduced profitability and fluctuating demand.

    • Name: Micron Technologies

    • Ticker: MU

    • Earnings: March 20th AMC

    • Consensus EPS: $1.28​

    • Ticker: DAL

    • Earnings: April 9th BMO

    • Consensus EPS Estimates: $0.43

  • Humble Beginnings:

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    • Micron was founded in Boise, Idaho, in 1978, initially as a semiconductor design consulting company.   

    ​

    • Early funding came from local Idaho businessmen, and notably, from J.R. Simplot, the "potato king," whose company supplied potatoes to McDonald's. This connection led to McDonald's also investing in Micron.   

    ​

    • They began their operations from the basement of a dentists office.   
       

    From Consulting to Manufacturing: 

    • They shifted from consulting to manufacturing, producing 64K DRAM chips in 1981.   

    ​

    Pioneering Technology:

    • Micron has been at the forefront of memory technology, contributing to advancements like atomic layer deposition high-k films for DRAM.    

    ​

    Broad Impact:

    • Micron's memory and storage solutions are essential components in a wide range of devices, from personal computers and smartphones to data centers and automotive systems.  

    Delta Air Lines has a rich and fascinating history, filled with many interesting facts. Here are a few highlights:


    From Crop Dusting to Commercial Flights:
    Delta's roots trace back to 1925 as Huff Daland Dusters, an aerial crop-dusting operation in Macon, Georgia.This makes them one of the oldest operating airlines in the United States.


    A History of "Firsts":
    Delta has a long track record of pioneering advancements in the airline industry. They were the:

    • First airline to offer gift certificates for flights in 1946.

    • First airline to begin jet training of personnel in 1957.

    • First airline to launch Douglas DC-8 jet service in 1959.First airline to ban smoking on all flights in 1995.

    • First airline to offer in seat power.

    • First airline to allow customers to track thier checked bags.

    Atlanta's Dominance:
    Atlanta's Hartsfield-Jackson Atlanta International Airport is Delta's largest hub, and Delta plays a significant role in making it one of the world's busiest airports.


    The Delta Flight Museum:
    Delta has its own museum located at its Atlanta headquarters, showcasing the airline's history and aviation advancements. It's a great place for aviation enthusiasts.


    TechOps: 

    Delta has a very large and well respected maintenance division called TechOps. This allows Delta to maintain a large portion of it's fleet, and also allows them to do maintenance for other airlines

OVERVIEW

$0.46 vs $0.38

BEAT

EARNINGS RESULTS

PRE-EARNINGS CONTEXT

DELTA AIRLINES (DAL) reported its first-quarter 2025 earnings demonstrating solid profitability amid a shifting economic landscape. Key highlights include:


Financial Performance:

  • Adjusted earnings per share (EPS) of $0.46, surpassing analyst expectations of $0.38.

  • Adjusted revenue of $12.98 billion, in line with expectations.

  • Net income of $240 million, up significantly from $37 million in the same period last year.

  • Operating cash flow of $2.4 billion.


Outlook:

  • Second-quarter revenue projected to be down 2% to up 2% year-over-year.

  • Second-quarter EPS guidance of $1.70 to $2.30.

  • Planned capacity growth in the second half of 2025 reduced to flat year-over-year.

  • Full-year 2025 financial guidance not reaffirmed due to economic uncertainty.


Key Factors:

  • CEO Ed Bastian cited "broad economic uncertainty around global trade" as a primary concern, particularly regarding President Trump's trade policies.

  • A slowdown in corporate travel demand and main cabin bookings was observed in late February and March.

  • International and premium travel segments remained relatively resilient.

  • Strong cost performance and diverse revenue streams helped maintain profitability.

  • Delta is focused on protecting margins and cash flow by controlling what it can.


Operational Highlights

  • Delta reported strong operational performance, including on-time arrivals and departures.

  • The company continued to expand its fleet, taking delivery of new aircraft.

  • Delta continued to focus on customer experience, including Sky Club expansions and in flight improvements.


Financial Health

  • Delta is maintaining a strong balance sheet and is focused on debt reduction.

  • The company ended the quarter with $6.8 billion in liquidity.


Analysis

Delta's Q1 results indicate a company that is navigating a complex economic environment. While the airline exceeded earnings expectations, the revised outlook reflects growing concerns about consumer and corporate spending. The decision to reduce capacity growth and withhold full-year guidance suggests a proactive approach to managing potential risks.


The company's focus on cost control, diverse revenue streams and a strong balance sheet positions it to weather the current economic uncertainty. The strength of the premium and international travel sectors also provides a degree of resilience. However, the impact of trade policies and potential economic slowdowns remains a key factor to watch.

POST EARNINGS TAKES

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