Investing.com -- Shares of major U.S. airlines soared in today's trading session after Delta Air Lines Inc. (NYSE: NYSE:DAL) reported a strong financial performance that exceeded Wall Street's expectations for the last quarter of 2024. The positive results and an optimistic outlook for the new year have cast a favorable light on the industry, influencing the stocks of Delta's peers.
United (NASDAQ: UAL) led the pack with a 7% increase, while American Airlines Group Inc. (NASDAQ: NASDAQ:AAL) climbed 4.5%. Delta itself saw shares jump 7%, and Southwest Airlines Co. (NYSE: NYSE:LUV) enjoyed a 3% uptick. The surge in Delta's stock, which could mark its biggest gain since October 2022 if sustained, was fueled by its robust earnings and the anticipation of continued momentum into 2025.
Delta's adjusted profit for the first quarter is projected to be between 70 cents and $1 a share, outpacing analyst expectations. The airline also forecasts revenue growth of up to 9% from the previous year, surpassing analyst projections of a 5.75% increase. Chief Executive Officer Ed Bastian expressed confidence in the current supply-demand balance and the company's visibility into the spring of 2025.
The airline industry is benefiting from higher fares due to controlled expansion in the domestic market and strong demand for international flights, even during the winter season. Analysts predict that these factors, along with new premium offerings from discount carriers, could result in the U.S. industry's first profitable first quarter since 2019.
Delta's fourth-quarter adjusted profit was reported at $1.85 a share, compared to analyst estimates of $1.76. Revenue reached $14.44 billion, again exceeding Wall Street's expectations of $14.16 billion. The company attributed the robust performance to a 10% increase in corporate travel sales, spurred by the technology and financial services sectors.
International travel revenue increased by 6% YoY, with premium revenue outpacing that of the coach cabin. Additionally, Delta's partnership with American Express Co (NYSE:AXP). saw a 14% increase in payments for loyalty points, nearing $2 billion. The airline plans to reward its employees with $1.4 billion in profit sharing next month.
Delta's positive results and forward-looking statements have provided a lift to its peers in the airline industry, signaling a strong start to 2025 for U.S. carriers.
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