How Will Delta Stock React To Its Upcoming Earnings?

April 7th, 2025 by Trefis Team

Delta Air Lines (NYSE:DAL) is set to report its earnings on Wednesday, April 9, 2025. Consensus estimates for the current quarter indicate expected earnings of $0.43 per share on sales of $13.66 billion. This represents a decrease from the prior-year quarter, when the company reported earnings of $0.45 per share on sales of $13.75 billion. Falling consumer sentiment likely contributed to a softening in air travel. This may be reflected in the significant 30% drop in DAL stock over the past thirty days. While this decline is primarily attributed to the broader market downturn, these market concerns appear to be amplified by wider economic anxieties. Specifically, President Donald Trump’s recent announcement of sweeping tariffs on goods from over 100 countries has heightened worries about the potential negative impact on the U.S. economy and consumer spending. Consequently, the combination of softening demand and broader economic uncertainty presents a challenging outlook for airlines, including DAL.

Now, Delta has $24 Bil in current market capitalization and its revenue over the last twelve months was $62 Bil. It was operationally profitable with $6.0 Bil in operating profits and net income of $3.5 Bil over this period. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader. There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released.

See earnings reaction history of all stocks

Image by Cor Gaasbeek from Pixabay

Delta Air Lines’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

  • There are 20 earnings data points recorded over the last five years, with 5 positive and 15 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 25% of the time.
  • The percentage remains the same at 25% if we consider data for the last 3 years instead of 5.
  • Median of the 5 positive returns = 4.0%, and median of the 15 negative returns =-2.7%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

DAL Observed 1D, 5D, and 21D Returns Post Earnings

 

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

Correlation Between 1D, 5D and 21D Historical Returns

Systematic Strategies & Rules-Based Wealth Management

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