Delta Airlines (DAL) will report 2Q earnings tomorrow before the bell. The stock is up around 10% over the last year but is down 16.5% since the start of 2025. After a steep drop through February, the stock has been recovering somewhat since its last earnings report. The options market is implying a move of around $3 a share up or down, or about a 6% move.

Zacks anticipates EPS of $2.01 (-15% year-over-year) and revenue of $16.14 billion (-3% year-over-year). Investors will also be watching statistics like load factor, cost per available seat mile (CASM) vs passenger revenue per available seat mile (PRASM), and the cost of fuel. Lower oil prices in April and May may help Delta maintain margins. 

DAL has some pressure on its shoulders, as it projected a record year – the strongest in its 100-year history – after closing out 2024 with its most profitable quarter ever. It then reduced its 1Q25 guidance, citing harsh weather, weakening consumer sentiment, and aviation accidents. CEO Ed Bastian noted on the last earnings call in April that "given broad economic uncertainty around global trade, growth has largely stalled" with "softness in both consumer and corporate travel" in Delta's main cabin. As such, Delta's management elected not to update on its full-year guidance.

Delta later announced it would scale back its summer flight schedule. Competitor United Airlines (UAL) also cut its summer schedule, suggesting more of an industry-wide trend than a specific company difficulty.

Aviation accidents have dropped out of the news lately, but earlier in the year saw a mass of incidents. CEO Ed Bastian said the American Airlines (AAL) crash in January at Washington Reagan National Airport shook “a whole generation” of fliers. Mechanical incidents, as we’ve seen this year with Boeing (BA) planes, and labor issues like a lack of air traffic controllers and pilots are undercurrents in the industry to watch.

However, things could be brightening for Delta, at least on the demand picture. Though it won’t show up in this quarter’s numbers, the AAA and the TSA both projected record travel seasons over the July 4 weekend. AAA estimated 5.84 million travelers by air, +1.4% over last year – and they expect the cost to be up by 4% vs 2024. In contrast, the TSA estimated it would screen over 18.5 million travelers from July 1-7.

Investors are also paying more attention to premium offerings and member loyalty as airlines try to make customers stickier. Delta has performed well in those areas before, but we’ll have to see if their numbers satisfy markets.

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