Airlines

Airline stocks jump after Delta raises first-quarter earnings guidance on strong demand

Key Points
  • Delta expects to earn between 85 cents and 95 cents per share during the first quarter.
  • Non-fuel costs will be about the same or about half a percentage point higher than last year.
  • It's now projecting a 2 percent bump in first-quarter revenue for each passenger it flew per mile, a key industry metric.
Delta Air Lines Boeing 767-300 seen landing at Amsterdam Schiphol Airport in mist.
Nicolas Economou | LightRocket | Getty Images

Airline stocks jumped Tuesday after Delta Air Lines said record performance and healthy demand drove the carrier to raise its earnings and revenue guidance for the first quarter.

Delta's shares jumped 6.6 percent while United and American rose 4.7 percent and 2.2 percent, respectively. Southwest Airlines, JetBlue, Spirit and Alaska Air Group were all trading higher Tuesday morning.

Delta told investors it expects to earn between 85 cents and 95 cents per share during the first quarter, up from its previous estimate of 70 cents to 90 cents per share, on an adjusted basis. Before Tuesday's announcement, analysts expected the company to earn 80 cents a share for the first three months of the year.

Non-fuel costs are less expensive than originally projected, the company said, adding that they will be about the same or about half a percentage point higher than last year. It previously estimated non-fuel costs would be up 1 to 2 percent.

Delta said it's now projecting a 2 percent bump in first-quarter revenue for each passenger it flew per mile, a key industry metric, from the year-earlier period.

Delta expects 7 percent earnings growth for the first three months of 2019, and $1.6 billion of shareholder returns.

The airline also said its exclusive partnership with American Express has leveraged co-brand momentum through a high-margin revenue stream. Delta said Tuesday that it's extending the partnership through 2029.

Correction: This article has been updated to correct the analysts' estimates. It was 80 cents a share.