Click to view the earnings moves in DAL
Delta Air Lines Earnings Impress—But Does History Support a Lasting Stock Rally?
Delta Air Lines (NYSE: DAL) wowed the Street today, with its stock surging 5.3% to $59.98 after reporting record September quarter revenue and raising its outlook for 2025. But here's the question savvy traders should be asking: Will these gains stick, or are they at risk of fading like so many past earnings pops?
Delta’s Q3: A Picture of Strength
Today's announcement showed Delta firing on all cylinders—strong passenger growth, margin expansion, upbeat corporate travel trends, and adjusted earnings per share at the high end of guidance. The company’s positive forecast for the December quarter and a bullish full-year free cash flow projection fueled today’s stock rally. The options market had been bracing for a ±6.9% move, yet DAL's actual jump was slightly smaller, signaling optimism without wild surprise.
Today's option volume ballooned to 131,362 contracts—well above typical levels. And the most actively traded single-leg contract was the 17-Oct-25 65 Call—suggesting traders are betting on further upside, or hedging recent gains:
| Option Contract | 17-Oct-25 65 C |
|---|---|
| Volume | 6,070 |
| VWAP price | 0.44 |
| Open interest | 20,063 |
| Yesterday's closing price | 0.48 |
What History Tells Us: DAL’s Earnings Day Playbook
Strong earnings day rallies aren't new for Delta—but a closer look at DAL's historical stock performance around earnings tells a more nuanced story. On average, the stock rises +2.2% on earnings day, but those green moves occur less than 34% of the time, with the majority of earnings reactions skewing negative. Today’s 5%+ pop is big—but how likely is it to persist?
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | +2.2% | +1.3% | +3.9% | -3.2% | +0.8% |
| % of Moves Up | 33.3% | 66.7% | 41.7% | ||
| % of Moves Down | 66.7% | 33.3% | 58.3% |
Takeaway: While average returns look positive, negative moves outnumber up days. Historically, a strong gap higher is as likely to fizzle as to follow through, with open-to-close drift averaging just +0.8% and closing lower 58% of the time.
How Big Are These Moves?
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 6.1% | 4.9% | 3.9% | 3.2% | 4.5% |
| Max Absolute Return | 23.4% | 11.2% | 21.2% | 5.6% | 19.3% |
| Min Absolute Return | 0.3% | 0.5% | 0.1% | 0.1% | 0.6% |
Post-Earnings Drift: A Fading Effect?
Traders looking for follow-through after the initial move may want to temper expectations. Historically, DAL has tended to give back gains over the days following earnings:
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | -1.7% | -0.6% | +0.1% | +0.1% | -0.9% |
| % of Moves Up | 36.4% | 45.5% | 54.5% | 45.5% | 45.5% |
| % of Moves Down | 63.6% | 54.5% | 45.5% | 54.5% | 54.5% |
Translation: One day after earnings, DAL falls 1.7% on average and only moves higher about a third of the time. Even two weeks out, the stock has been down more often than not.
Takeaway: Data, Hype, and the Risk of FOMO
DAL’s quarter delivered results that thrilled bulls and options traders alike, but the data reveals that outsized earnings-day pops have rarely translated to sustained rallies. If history is a guide, it may pay to watch for profit-taking, not just continued momentum.
Curious about the nuances in these earnings reactions and more detailed historical stats? Check out Delta’s full earnings price movement history here.
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