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Delta Air Lines (DAL) reported second quarter results that topped estimates on Friday morning and reinstated full-year guidance, as growth in the premium business continues to blunt issues like rising fuel costs and capacity cuts stemming from those expenses.

Delta reported Q2 adjusted revenue of $17.67 billion vs. an estimated $17.53 billion, per Bloomberg results, up 14% year over year, and a record for the airline. Delta posted adjusted earnings per share (EPS) of $1.56 vs. $1.51 expected, with adjusted net income of $1.027 billion vs. $985.2 million.

Delta also reinstated its full-year 2026 projections, seeing full-year adjusted EPS of $6.50 to $7.50, with free cash flow in the range of $3 billion to $4 billion. At the end of Q1, Delta removed its guidance, though CEO Ed Bastian said the company wasn't walking back the guidance, only that there would be no update to its projections.

Delta reinstated the guidance despite noting it had absorbed the highest quarterly fuel expense in its history. "We are affirming the guidance we set at the start of the year to grow earnings by 20%, overcoming a multi-billion fuel headwind," CEO Ed Bastian said in a statement.

Delta's fuel cost was substantial. Adjusted fuel expense came in at $4.4 billion, up 77% compared to a year ago. Fuel expenses in the first quarter came in at $2.591 billion, up 8% compared to a year ago. CFO Erik Snell said Delta's fuel bill for the year will be $4 billion higher than a year ago, directly eating into profits, though fuel recapture via Delta's refinery cut some of those costs.

In addition, Delta's demand is the strongest Snell has ever seen.

"We see revenue strength continue into the third quarter, as you know, a lot of the third quarter is already booked, so we expect continued revenue momentum," Snell added in a call with reporters.

The premium business performance blunted the added costs, with revenue growing 17% year over year, Delta said, and loyalty and related revenue up 19%. American Express remuneration hit $2.4 billion for the quarter, up 16% from a year ago. Premium corporate sales remained strong, up a healthy 25%.

Continuing the trend of maximizing its premium business, this week Delta announced a Basic Business class to its fare structure, offering a cheaper ticket in Delta One and business class that omits benefits like lounge access, fully refundable fares, seat selection, and reduced checked bags.ย 

Looking ahead to Q3, Delta projects revenue growth in the upper mid-teens, operating margin of 11% to 13%, and EPS of $2.00 to $2.50.

Pras Subramanian is Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.

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