Delta Air Lines had been expecting a record year. Then a trade war broke out

Delta Air Lines, which believed as recently as January that it was on track for its best financial year in company history, said Wednesday that disruptions in global trade have created such enormous uncertainty that it scratched its performance expectations for 2025.

It is a remarkable walk-back for the nation's most profitable airline, and other companies are following suit. Hours after Delta remove its guidance for the year, Walmart dropped the first quarter operating profit guidance it had provided to investors, citing tariff risks.

Delta is cutting its flight schedule in anticipation of a slowdown in spending as businesses and households brace for higher prices.

“With broad economic uncertainty around global trade, growth has largely stalled," CEO Ed Bastian said in a statement on Wednesday. "In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year.”

In the first quarter, Delta earned $240 million, or 37 cents per share. A year earlier it earned $37 million, or 6 cents per share, when profit was weighed down by a new contract with pilots.

Stripping out one time costs and benefits, earnings were 46 cents per share. That's better than the 40 cents per share analysts polled by Zacks Investment Research predicted.

Shares of Delta Air Lines Inc. rose more than 8%. Citi analysts suggested Delta may be the best airline with which to ride out the uncertainty in coming months for investors who want to maintain exposure to the travel sector.

“Overall, these results show a carrier with a resilient business model, in light of significant uncertainties around demand and the global tariff controversy,” Stephen Trent of Citi Investment Research wrote in a note to clients.

Still, the sector has been battered this year as investors, anticipating trouble from rising tariffs, put their money elsewhere. Shares are down 41% this year for the nation's most profitable airline, which is better than rivals American and United.

Quarterly operating revenue climbed to $14.04 billion from $13.75 billion, beating Wall Street's estimate of $13.81 billion.

The average fuel price per gallon declined to $2.47 from $2.79.

Delta cut its first-quarter earnings and revenue outlook last month, saying at the time that a recent decline in consumer and corporate confidence amid growing uncertainty over the economy was weakening domestic demand.

Delta said in March that it expected first-quarter revenue to rise between 3% and 4% compared with a year earlier, down from projections of 7% and 9%.

In January, Delta released fourth-quarter results that topped Wall Street’s profit and revenue estimates, as the company benefited from strong demand during the crucial holiday period.

Yet conditions have deteriorated since then with a burgeoning trade war leaving consumers and businesses unsure about what comes next. Both have begun to pull back on spending, and that includes travel.

Bastian said Delta foresees June quarter profitability of $1.5 to $2 billion but will not update its full-year outlook “given the lack of economic clarity.”

The airline previously said that it expected 2025 earnings of more than $7.35 per share and free cash flow of more than $4 billion. At the time the company was expecting strong travel demand to continue, and that has clearly changed.

A month ago Bastian was confident enough to stick by Delta's guidance for the year. Speaking at the JPMorgan Industrial Conference, the executive said at the time that Delta was feeling good about where it was at.

“There’s nothing that we’ve been through these last couple of months to indicate there’s any cracks in any of this,” he said. “We anticipate margins continuing to expand and we think margins will expand this year, even with the slower start to the year.”

Yet uncertainty over U.S. trade policy has rattled companies in every economic sector since then.

Bastian said during Delta's earnings call on Wednesday that the airline is seeing softness in domestic consumer and business travel given all of the uncertainty. There's been greater resilience in the international market so far, he added.

Bastian maintained that given current fuel prices and actions being taken, Delta is “well positioned to deliver solid profitability and meaningful cash flow in 2025.”

For the second quarter, the airline is looking for earnings between $1.70 and $2.30 per share, with total revenue down 2% to up 2%. Analysts surveyed by FactSet predict earnings of $2.21 per share.

“2025 is playing out differently than we expected at the start of the year,” Delta President Glen Hauenstein said. "As a result, we are adapting to current conditions while staying true to our long-term strategy.”