Southwest Airlines Co. (NYSE: LUV) topped analysts’ forecasts for earnings in the third quarter of 2019 while revenues matched expectations. Shares were up 1.9% in premarket hours on Thursday.
Total operating revenues of $5.64 billion was up 1.1% from the same period last year and in line with estimates.
Net income was $659 million, or $1.23 per share, compared to $615 million, or $1.08 per share, in the prior-year quarter. Analysts had projected EPS of $1.08.
During the quarter, unit revenues (RASM) grew 4.2% year-over-year, driven mainly by a passenger revenue yield increase of 4.1%. Capacity decreased 2.9% year-over-year.
Total operating expenses increased 0.9% to $4.8 billion from the prior year. Unit costs (CASM), excluding fuel, oil and profit-sharing expense, increased 7.6%. Economic fuel costs were $2.07 per gallon. Fuel efficiency dropped 0.9% due to the removal of the company’s most fuel-efficient aircraft from its schedule due to the Max groundings.
For the fourth quarter of 2019, Southwest expects RASM to be flat to up 2%. Capacity is projected to decrease 0.5-1% year-over-year. CASM, excluding fuel and oil expense and profit-sharing expense, is expected to increase 4-6%. Fuel efficiency is expected to drop 1-2% due to the Max groundings. Economic fuel costs are estimated to be in the range of $2.05 to $2.15 per gallon.
Southwest expects capacity for full-year 2019 to decrease approx. 1.5% year-over-year. Due to the delay in MAX deliveries, and based on Boeing’s targeted regulatory approval of MAX return to service in Q4 2019, the company now estimates 2019 capital expenditures to be in the range of $1.1 billion to $1.2 billion, compared with the previous range of $1.2 billion to $1.3 billion.
Based on Boeing’s targeted regulatory approval of MAX return to service in Q4 2019, Southwest now expects to receive seven MAX aircraft deliveries during the fourth quarter, with the remaining 34 MAX aircraft originally scheduled for delivery in 2019 shifting into 2020. Due to the MAX groundings, the company deferred the retirement of seven of its owned 737-700 aircraft to future years.
Listen to on-demand earnings calls and hear how management responds to analysts’ questions
Most Popular
Intensity Therapeutics is establishing a new field of localized cancer reduction: CEO
Intensity Therapeutics, Inc. (NASDAQ: INTS) is a clinical biotechnology company engaged in the discovery development, and commercialization of first-in-class cancer drugs that attenuate tumors with minimal side effects while training
INTU Earnings: Intuit Q1 2025 adj. profit rises on higher revenues
Financial technology company Intuit Inc. (NASDAQ: INTU) Thursday announced results for the first quarter of 2025, reporting a modest increase in adjusted earnings. The Mountain View-headquartered company’s first-quarter revenue came
Riding the AI wave, Nvidia looks set to stay on the high-growth path
After delivering strong results for the third quarter, Nvidia Corporation (NASDAQ: NVDA) this week said the launch of its new-generation Blackwell chip is on track. The company is thriving on
