Revenue
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.