What We Learned Today From Delta Air Lines, PepsiCo, and Taiwan Semi
Let's connect the dots to the upcoming earnings season and our Pro Portfolio holdings.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
As part of our ongoing effort to “connect the dots” as we see the pace of quarterly earnings accelerate next week and even further the following one, let’s dig into what we learned today from Delta Air Lines (DAL) , PepsiCo (PEP) , and Taiwan Semiconductor (TSM) .
Delta Air Lines
Delta delivered a beat-and-raise September quarter, and these were the comments that stood out to us on the company’s earnings call this morning:
Since July, travel demand has strengthened, led by a rebound in business travel, which was up high single digits in the quarter. The US economy remains on solid footing, and our customer base is financially strong with rising preference for premium products and services.
Corporate sales trended positively throughout the quarter, up 8% over prior year with sequential improvement across all sectors. Domestic corporate sales grew double digits, including mid-teens growth in our coastal hubs. We see opportunities for further growth as corporate confidence rebuilds, reinforced by 90% of our most recent corporate survey respondents anticipating that their 2026 travel volumes will increase or remain steady year-over-year.
American Express remuneration of $2 billion grew 12 percent over prior year, driven by double-digit co-brand spend growth.
The takeaways we have from those comments are that corporations have learned to navigate the tariff and trade war front and that Delta’s leaning into the premium market is paying off. This is reinforced by Spirit Airlines being back in bankrupty, and the combination reinforces the tough time lower-income consumers are having amid sticky inflation pressures.
We see American Express (AXP) positioned like Delta, and Delta’s comment about co-brand spend strength bodes well for Amex’s transaction facing business. However, when Amex reports we’ll be more interested in early comments about its Platinum card refresh and more about recently announced digital advertising platform, Amex Ads.
PepsiCo Confirms Our Thinking on Margins
Earlier this week we explained why the margin pressure found in quarterly results from McCormick & Co. (MKC) confirmed our thinking that gross-margin performance will be a factor to watch in the soon-to-accelerate September-quarter earnings season. The backdrop is that companies are having a more difficult time passing along price increases while they grapple with rising input prices.
The trend we saw in PepsiCo’s gross margin in its Q3 2025 earnings report adds another layer of support. Gross margins for the September quarter came in at 53.6%, down from 54.7% in the June quarter, 55.8% in the March quarter and 55.4% posted for September 2024.
What’s driving that pressure? Input and ingredient prices and related tariff impacts with PepsiCo management sharing those higher costs represented a three-percentage point headwind to the company’s results.
Reading between the company’s revised 2025 guidance that calls for a low-single digit volume increase and flat core EPS, suggests margins aren’t poised to rebound near-term.
We doubt McCormick and PepsiCo will be the only two companies facing these pressures.
Taiwan Semi’s September Revenue Up More Than 30% Year Over Year
Taiwan Semiconductor released its latest monthly revenue report, one that we and those investing in the likes of Nvidia (NVDA) , Apple (AAPL) , Qualcomm (QCOM) and a others pay close attention to. While September sales dipped 1%, which is not out of line given historical seasonality, the company’s revenue rose 31.4% on a year-over-year basis.
Looking at the aggregate revenue for the trailing three months, it points to TSM’s September-quarter revenue being up 30% year over year and 6.0% compared to the June quarter. We see that laying the groundwork for positive September-quarter results for several of our holdings. When TSM reports its September quarter results on October 16 its end-market results should bring even more color.
At the time of publication, TheStreet Pro Portfolio was long AXP, NVDA, AAPL and QCOM.
