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Delta Air Lines (DAL - Free Report) gave a glimpse at how the large domestic airliners have been faring after reporting third quarter results on Thursday, with United Airlines (UAL - Free Report) and American Airlines (AAL - Free Report) set to release their Q3 reports in the coming weeks.

Although Delta’s Q3 financial metrics were mixed, the company’s valuation and post-pandemic recovery have still been enticing.

Delta’s Q3 Results

Delta posted Q3 EPS of $1.50 on operating income of $971 million, which decreased 26% from $2.03 per share in the prior year quarter on earnings of $1.31 billion. This also missed Q3 EPS estimates of $1.56 by -4%.

Notably, the year-over-year decline in Delta’s bottom line was attributed to a global technology outage earlier in the quarter after a malfunction in a software update by security vendor CrowdStrike (CRWD - Free Report) led to thousands of flight cancellations.

Still, Delta’s Q3 sales of $15.67 billion beat expectations of $15.37 billion by 2%, and Delta was up 1% from a year ago despite incurring a $500 million loss from the faulty software update.

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Tracking Delta’s Outlook

Optimistically, Delta expects improved trends to continue in regards to post-pandemic travel demand, stating bookings for the Q4 holiday season are strong. Delta anticipates record Q4 revenue of $14.5-$14.8 billion, which came in above the current Zacks Consensus of $14.52 billion, or 2% growth.

Delta’s full-year revenue projections for fiscal 2024 call for 2%-4% growth, which fell in line with Zacks estimates of 3% growth, or $59.85 billion in sales. Based on Zacks estimates, Delta’s total sales are forecasted to rise another 5% in FY25 to $62.91 billion.

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Fourth quarter EPS projections of $1.60-$1.85 also came in range with the Zacks Consensus of $1.82 per share, which would be a 42% increase from $1.28 a share in Q4 2023.

Delta now expects full-year FY24 EPS of $6.00-$7.00 compared to previous guidance of over $7 a share, although this lines up with estimates of $6.17 per share, a decline of -1% from 2023.

That said, FY25 EPS is projected to rebound and soar 17% to $7.26 based on Zacks estimates.

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Delta's Stock Performance & Valuation

Trading at around $50 in recent days, Delta’s stock has moved up +25% in 2024. Also, shares were virtually flat during Friday's trading session. Year-to-date, the stock has trailed United Airlines' gains of +47%, but it has slightly edged over the benchmark S&P 500’s performance and American Airlines' +15%.

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Most intriguing is that Delta stock still has been trading at just 8.1X forward earnings and at a steep discount to the benchmark’s 24.5X. Delta’s stock has also been trading beneath its Zacks Transportation-Airline Industry average of 10.1X forward earnings, with American Airlines at 9.6X and United Airlines at 6.1X.

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Bottom Line

Delta’s stock currently maintains a Zacks Rank #3 (Hold) rating. While Delta’s Q3 results weren’t overwhelming, the company’s outlook remains attractive. Futhermrore, holding the stock may certainly be rewarding given Delta's upbeat guidance for the upcoming holiday season.

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