Delta cut its outlook and finished flat. Friday's other big movers, explained

Delta's report was one of the first of the third-quarter earnings season, and it showed how much this year's oil shock is costing companies that burn fuel. It also showed that a weak forecast does not always mean a weak stock. Elsewhere, an AI supplier said it has nothing left to sell for years, and a report on iPhone orders weighed on Apple.

Delta: a miss, a cut and a flat close

Delta Air Lines reported adjusted earnings of $1.72 a share on adjusted revenue of $17.59 billion for the September quarter. Analysts polled by LSEG had expected $1.75 a share on $17.67 billion. CNBC reported that it was the first time in two years that Delta missed estimates.

The bigger change was to the outlook. Delta now expects full-year adjusted earnings of $5.10 to $5.60 a share, down from the $6.50 to $7.50 it forecast in July, when fuel prices were lower. It cut its free cash flow outlook to about $2.5 billion from as much as $4 billion. For the December quarter, it guided to earnings of $1.15 to $1.65 a share, assuming an all-in fuel price of about $4.25 a gallon.

Fuel is the reason. Jet fuel in the US Gulf of Mexico region cost $4.34 a gallon on Thursday, almost double the $2.19 of a year earlier, according to FactSet data cited by CNBC. Delta said it expects to absorb a $6 billion increase in fuel costs this year while still producing a pre-tax profit of roughly $4.5 billion.

Chief executive Ed Bastian argued that demand is holding up. "Demand remains strong, supported by consumers' growing preference for experiences and travel, with air travel continuing to be one of the best values in the consumer economy," he said in the company's release. Delta said it expects December-quarter revenue to grow about 20%, and Bastian told CNBC that fares have kept rising as the airline passes on higher costs.

The stock reflected that tug of war. Delta shares were down almost 2% at midday, CNBC reported, but recovered to finish up 0.04% at $82.17.

Lumentum: sold out until 2029

Lumentum Holdings rose 5.22% to $1,103.36. Chief executive Michael Hurlston told Bloomberg in an interview in Tokyo that the company's optical components are "completely sold out" through early 2029, as technology companies race to build faster AI data centers.

Hurlston said Lumentum cannot meet about 70% of demand for some products through next year, and will be unable to address about 30% of demand for other products through 2028. Six months earlier he had said the company was on track to sell out its capacity through 2028, Bloomberg reported, and customers are already starting to lock in orders for 2030.

Apple: a report on iPhone orders

Apple fell 1.11% to $336.64. Nikkei Asia reported that the company was cutting component orders for the iPhone 18 Pro after weaker-than-expected demand, CNBC reported. Because of its size, even a modest move in Apple matters for the major indexes.

Teva, Avient and the insurers

Teva Pharmaceutical Industries gained 4.71% to $41.10 after the Food and Drug Administration approved Weltruza, its monthly long-acting injectable treatment for schizophrenia in adults.

Avient, the specialty chemicals and plastics maker, fell 7.78% to $37.79 after chief executive Ashish Khandpur stepped down. The company said Mike Frank will replace him.

Medicare Advantage insurers moved on the government's 2027 star ratings, which went live on the Medicare Plan Finder ahead of open enrollment. Humana closed up 11.56% at $431.87 after its largest contract regained a higher rating, while Alignment Healthcare fell 13.38% to $7.54.

What carries into next week

Delta's report sets the template for the rest of the airline group: strong bookings on one side, a much higher fuel bill on the other. More large companies report in the days ahead, and the September CPI report on Wednesday will show how much of the energy shock is reaching consumer prices more broadly.

For the AI supply chain, Lumentum's comments add to a run of signs that some component makers are capacity-constrained rather than demand-constrained, a theme investors will test against the next round of hyperscaler spending updates.