Delta Air Lines (NYSE: DAL) reported record annual revenue of $58.3 billion for 2025 and strong fourth-quarter results, yet its stock tumbled approximately 5% in premarket trading on Tuesday, January 13, 2026. The sell-off was triggered by the company's 2026 earnings guidance, which fell short of market expectations, highlighting a disconnect between strong historical performance and a cautious forward outlook.
The airline's Q4 2025 operating revenue reached $16.0 billion, a 2.9% year-over-year increase. Adjusted earnings per share (EPS) of $1.55 slightly beat analyst estimates. For the full year 2025, Delta generated a robust $4.6 billion in free cash flow, enabling $1.3 billion in profit-sharing for employees.
However, underlying metrics revealed concerning trends. Adjusted total unit revenue (TRASM) was flat in Q4, and main cabin revenue declined 7% year-over-year to $5.62 billion, despite a 9% rise in premium cabin revenue. The quarter also faced a 2-percentage-point revenue headwind from a government shutdown.
The core of the market's negative reaction was Delta's 2026 guidance. The company projected full-year EPS between $6.50 and $7.50, representing about 20% growth at the midpoint but below the analyst consensus of $7.32. For Q1 2026, EPS guidance of $0.50 to $0.90 also missed the $0.72 forecast. Furthermore, Q1 2026 operating margin guidance of 4.5% to 6% sits below historical norms.
CFO Dan Janki stated the company expects "another year of cost performance aligned to our long-term framework on capacity growth of approximately 3 percent." The stock had rallied 42% in the prior six months, leaving it vulnerable to a "priced-for-perfection" sell-off when future growth appeared less certain.
Despite the guidance-driven crash, Delta highlighted strengths including strong corporate travel demand, loyalty program growth, and a $4.6 billion free cash flow that supports debt reduction. The company also placed an order for thirty Boeing 787-10 aircraft for future efficiency gains.
