What to expect when Southwest Airlines (LUV) reports Q4 2024 earnings results

Shares of Southwest Airlines Co. (NYSE: LUV) rose over 1% on Monday. The stock has gained 7% over the past three months. The airline is slated to report its fourth quarter 2024 earnings results on Thursday, January 30, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $6.95 billion for Southwest in Q4 2024, which implies a growth of around 2% from the same quarter a year ago. In the third quarter of 2024, operating revenues increased over 5% year-over-year to $6.87 billion.

Earnings

The consensus estimate for earnings per share in Q4 2024 is $0.46, which compares to adjusted EPS of $0.37 reported in Q4 2023. In Q3 2024, adjusted EPS decreased 60% YoY to $0.15.

Points to note

In an investor update last month, Southwest revised its guidance for the fourth quarter of 2024. The company now expects unit revenues to increase 5.5-7.0% year-over-year versus the previous range of 3.5-5.5%. The revised outlook is based on better-than-expected leisure travel demand and benefits from revenue management techniques.

The company has been taking measures to improve its network optimization and capacity rationalization and to advance its revenue management techniques. These efforts have been yielding benefits. Its holiday travel trends and forward bookings have been encouraging and strong revenue trends are expected to carry into 2025.

Capacity is expected to be down around 4% year-over-year. 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. Economic fuel costs per gallon are now expected to be $2.35-2.45 versus the previous range of $2.25-2.35.