Revenues
Earnings
The consensus estimate for EPS in Q3 2023 is $0.38 which compares to EPS of $0.50 reported in the prior-year quarter. In Q2 2023, the company reported adjusted EPS of $1.09.
Points to note
Southwest expects strong operating revenues for the third quarter of 2023 on the back of solid performance during the Labor Day holiday period and overall healthy demand for leisure travel. The company also expects corporate travel to have improved in Q3.
However, the airline did face challenges in the third quarter. Close-in leisure bookings in August were impacted by seasonal trends and the company had to deal with cancellations in the quarter due to severe weather conditions. The industry, in general, has also been dealing with rising fuel costs.
Southwest has lowered its guidance for unit revenues and now expects it to be down 5-7% YoY in Q3 versus the previous expectation of down 3-7%. It expects capacity to be up 12% YoY. The company raised its outlook for fuel costs to $2.70-2.80 per gallon from the prior range of $2.55-2.65. Operating expenses per available seat mile, excluding fuel, (CASM-X) is estimated to be up 3.5-6.5% YoY.