Southwest Airlines (LUV) set to report Q3 2024 earnings results next week, what to expect

Shares of Southwest Airlines Co. (NYSE: LUV) were down over 2% on Thursday. The stock has gained 9% over the past three months. The airline is slated to report its earnings results for the third quarter of 2024 on Thursday, October 24, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $6.7 billion for Southwest for the third quarter of 2024. This compares to revenues of $6.5 billion reported in the same quarter a year ago. In the second quarter of 2024, operating revenues increased nearly 5% year-over-year to $7.4 billion.

Earnings

The consensus estimate for Southwest’s Q3 2024 earnings is $0.04 per share, which compares to adjusted EPS of $0.38 reported in Q3 2023. In Q2 2024, adjusted EPS amounted to $0.58.

Points to note

Southwest is expected to benefit from strong travel demand and low fuel costs in the third quarter. In an investor update last month, Southwest revised its guidance for the third quarter of 2024. The company now expects unit revenues for Q3 to increase 2-3% YoY versus its previous expectation of flat to down 2%.

The improved outlook for unit revenues reflects benefits from re-accommodating customers of other airlines who had their flights cancelled due to the CrowdStrike outage in July. It also reflects improved industry demand trends and the company’s revenue management actions. Southwest now expects revenue per available seat mile (RASM) to trend positive, on a YoY basis, for the rest of 2024.

Capacity is expected to be up around 2% YoY in Q3. Economic fuel costs per gallon are now expected to range between $2.50-2.60 versus the prior range of $2.60-2.70. Operating expenses per available seat mile, excluding fuel and oil expense, special items, and profit-sharing, or CASM-X, is expected to be up 11-13% YoY in Q3.