DAL Q3: adj EPS $1.72 misses ~$1.81–1.88 street, FY guide cut to $5.10–5.60 on fuel — revenue +16%, Q4 seen ~+20%

[LondonNewsTrader]

Delta is out (pre-mkt, call 10:00 ET), and this is the print that will set the tone for airlines today.

The quarter:
- Adjusted EPS $1.72. That's flat with last year ($1.71), below the ~$1.81–1.88 consensus range and well below Delta's own July guide of $2.00–2.50. GAAP EPS $1.15.
- Adjusted revenue was a record $17.6B (+16% y/y) on flat capacity. TRASM +15%, up 3 points from Q2. Premium +18%, loyalty +18%, cargo +29%.
- Adjusted operating margin 9.4%, pre-tax profit $1.5B. The CFO says the quarter absorbed more than $500M of fuel cost above the July guidance.
- Non-fuel CASM +7.3%, partly because capacity came in several points below plan (summer storms took about 1 point).

The guide:
- Q4 adjusted EPS $1.15–1.65, based on ~$4.25/gal all-in fuel (forward curve as of 2 Oct, including a ~$0.40/gal refinery benefit). Revenue about +20% y/y on seats up less than 2%.
- FY26 EPS $5.10–5.60 and FCF ~$2.5B. Pre-print previews had the full-year range at $6.50–7.50 with $3–4B FCF, so this is a big reset. Bastian frames it as ~$4.5B pre-tax profit while absorbing a $6B increase in fuel costs.

For the open:
- Demand is not the problem: revenue, unit revenue and corporate travel are all strong. The whole story is fuel, so DAL and the group will trade with crude. Brent eased toward ~$103 overnight after Trump said there would be no Iran strike before the midterms. That helps a little, but Delta's Q4 guide already assumes $4.25 jet.
- The FY cut matters more than the Q3 miss. Look at how the stock trades into the 10:00 call. If Bastian sounds confident about 2027 margins, early weakness can get bought. If it can't hold the pre-mkt low after the call, the read-through probably goes to UAL, AAL, ALK and JETS for the day.
- Expect wide spreads before the open. Wait for the opening range rather than chasing the first print.

Source: [Delta IR: September quarter 2026 results](https://ir.delta.com/news/news-details/ ... fault.aspx)

Is this a fade-the-gap setup, or does strong revenue get DAL bought? And who's trading the UAL/AAL sympathy instead of DAL itself?