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More Reading from MarketBeat
Delta's Double Miss Is a Warning for Airline StocksWritten by Jessica Mitacek. Publication Date: 4/13/2026. 
Key Points
- Despite record quarterly revenue, Delta reported a double miss for Q1 2026, driven in part by a 132% year-over-year spike in jet fuel prices caused by geopolitical instability and the closure of the Strait of Hormuz.
- The airline aims to offset rising costs through fleet modernization and its unique ownership of a fuel refinery.
- Delta has issued cautiously optimistic Q2 guidance, expecting to recover 40% to 50% of the “unprecedented” fuel headwinds while maintaining margins of 6% to 8% in Q2.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
Delta Airlines (NYSE: DAL) reported Q1 2026 earnings on Wednesday, April 8, announcing a double miss. In his earnings call comments, CEO Ed Bastian emphasized the role that “the significant step-up in fuel” played and acknowledged the airline faces “several external headwinds.”
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Those headwinds include fallout from the Iran conflict—specifically the closure of the Strait of Hormuz—which has disrupted global supply chains across the fossil fuel industry and driven a dramatic uptick in crude oil prices. For aviation in particular, jet fuel prices have risen about 132% year over year. Delta’s earnings and revenue misses should serve as a warning to the broader transportation industry within the industrials sector. Elevated input costs are likely to erode profit margins at companies heavily reliant on oil. The results also highlight a familiar airline risk: when jet fuel surges, even strong demand can be overshadowed by rising costs. Delta Posts Earnings and Revenue Miss for Q1The Q1 results weren’t all bad news. Bastian pointed to earnings that were 40% higher year over year—consistent with Delta’s guidance at the start of the year—as well as record revenue, which rose more than 9% year over year. Still, some disappointing aspects were hard to ignore. Despite record quarterly revenue, Delta's year-over-year revenue growth has declined each year since 2021, falling from nearly 75% to just 2.79% in 2025. Earnings per share (EPS) of $0.64 missed analyst expectations by $0.06, and revenue of $14.20 billion missed consensus by more than $497 million. Those shortfalls have raised concerns about the company’s ability to regain stronger revenue growth in 2026. Delta attributes the quarterly misses to short-term headwinds. The company said the conflict in the Middle East pushed its jet fuel assumptions for Q2 to roughly $4.30 per gallon—about double the price in Q2 2025. As a result, the airline expects more than $2 billion of incremental fuel expense in the current quarter. Despite Headwinds, Delta Issues Cautiously Optimistic Q2 GuidanceDelta says it plans to capture between 40% and 50% of that fuel headwind, a notable point given Bastian described the spike in jet fuel prices as “unprecedented.” That capture could offset up to $300 million in jet fuel costs through its vertically integrated refinery. Delta is the only U.S.-based airline that owns refining operations; it acquired the Trainer Refinery from Phillips 66 (NYSE: PSX) in 2012 to secure fuel supply, manage price volatility, and produce jet fuel for its fleet. In his remarks, Bastian added that the company’s focus “is on what we can control: running a reliable operation, taking care of our people and customers, and protecting our margins and cash flow.” Accordingly, the company issued cautiously optimistic Q2 guidance, including:
Year-over-year revenue growth: Low teens Operating margin: 6% to 8% EPS: $1.00 to $1.50 per share With a forward price-to-earnings ratio of 8.93, Delta’s EPS is expected to grow nearly 9% over the next year, from $7.63 to $8.28. Those expectations are supported by the airline’s fleet modernization plan, which includes 95 new aircraft on order and eight new deliveries in Q1. Wall Street Remains Bullish on DeltaDespite the double miss, Delta remains in favor on Wall Street: 24 of 26 analysts covering the stock assign it a Buy rating. Overall, shares of DAL carry a Moderate Buy rating. The consensus 12-month price target is $79.14, implying more than 16% upside from current levels and above the stock’s 52-week high of $76.39. Current short interest of 3.7% suggests bears do not expect significant near-term downside. Last month, $971 million worth of DAL shares were shorted, down from a five-year high of $2.27 billion in December 2024. Institutional ownership has remained robust over the past 12 months, with 915 buyers outnumbering 554 sellers and inflows of $6.41 billion slightly exceeding outflows of $4.00 billion. |
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