Investing.com -- Delta Air Lines shares fell on Friday after the company reported earnings, despite providing a stronger outlook for the fourth quarter of 2026, according to Melius Research.

The airline's implied fourth quarter guidance suggests it can maintain pricing even as supply increases modestly and fuel costs moderate. Delta expects only about 1.5 percentage points of additional growth in the fourth quarter compared to the third quarter, with third quarter growth at 1% and fourth quarter growth projected at 2% to 3%.

The company's second quarter 2026 unit revenue results came in broadly in line with expectations, supported by increased fare activity and moderating jet fuel costs.

Delta is projected to generate free cash flow of $3 billion to $4 billion, representing a 6% yield at the midpoint. The airline's leverage is set to reach 2 times gross by year end.

The stock declined 2% on Friday after rising 14% over the past month. Melius Research noted the pullback occurred despite the company's stronger guidance.

Delta has maintained its position that its premium brand, network depth and loyalty program will drive long-term fare premiums to the market. The airline's fourth quarter performance will serve as a key test of whether the industry can sustain higher pricing levels.