- Adjusted EPS: Southwest Airlines reported adjusted earnings per share (EPS) of 58 cents, beating the estimate of 51 cents.
- Operating Revenue: The company reported an operating revenue of $7.35 billion, which is a 4.5% increase year-over-year and above the estimate of $7.33 billion.
- Passenger Revenue: Passenger revenue reached $6.71 billion, a 4.7% increase year-over-year, surpassing the estimate of $6.69 billion.
- Freight Revenue: Freight revenue was $45 million, a decline of 4.3% year-over-year, missing the estimate of $49.2 million.
- Other Revenue: Other revenue came in at $597 million, up 2.8% year-over-year but slightly below the estimate of $601.3 million.
- Adjusted Net Income: Adjusted net income was $370 million, beating the estimate of $323.2 million.
- Adjusted Operating Income: The adjusted operating income was $405 million, exceeding the estimate of $334.5 million.
- Available Seat Miles: Available seat miles (ASMs) were 46.25 billion, up 8.6% year-over-year and above the estimate of 46.22 billion.
- PRASM: Passenger revenue per available seat mile (PRASM) was down 3.6% year-over-year at 14.51 cents.
- Revenue Passenger Miles: Revenue passenger miles were 38.22 billion, a 7.6% increase year-over-year, but shy of the estimate of 38.34 billion.
- Load Factor: The load factor was 82.6%, compared to 83.4% year-over-year, and slightly below the estimate of 82.9%.
- Average Passenger Fare: The average passenger fare was $178.94, a slight decline of 0.3% year-over-year, though still above the estimate of $178.19.
- Yield Per Passenger Mile: Yield per passenger mile was down 2.7% year-over-year at 17.56 cents.
- 3Q ASM Growth: Southwest projects ASMs to increase by about 2% in the third quarter year-over-year.
- Aircraft Deliveries: Southwest continues to anticipate around 20 -8 aircraft deliveries in 2024 amid ongoing talks with Boeing and expected delivery delays.
- 3Q Unit Revenue: The company expects third-quarter unit revenue to be flat to down 2% year-over-year but anticipates a positive inflection in the fourth quarter.
- CEO’s Statement: CEO Bob Jordan mentioned that the second-quarter performance was impacted by both external and internal factors and fell short of expectations.
- Customer Experience Upgrades: Southwest is implementing assigned and premium seating as part of a comprehensive upgrade to the customer experience.
Southwest Airlines Co on Smartkarma
Analyst Coverage of Southwest Airlines Co on Smartkarma
On Smartkarma, independent analysts share their insights on Southwest Airlines Co. Neil Glynn‘s report, titled “Southwest Airlines: Dissecting the Drivers of Profitability Drag,” offers a bearish outlook. The analysis highlights Southwest’s underperformance compared to other US major airlines, attributing it to labor cost challenges and revenue generation issues. The report suggests that heavy labor cost cuts may be necessary for improvement, as Southwest ranks among the bottom tier of the sector in terms of profitability metrics.
Contrastingly, Baptista Research‘s reports paint a more optimistic picture. In “Southwest Airlines: Revenue Enhancement through Robust Marketing and RM System Tuning! – Major Drivers,” the analysis showcases the company’s strengths, such as record Q1 operating revenues and passenger numbers. Another report by Baptista Research, “Southwest Airlines: Recovering Demand and Network Optimization! – Major Drivers,” highlights the strides made by Southwest in improving operational metrics, network optimization, and labor agreements.
A look at Southwest Airlines Co Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 4 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Southwest Airlines Co. is positioned favorably for the long term based on its Smartkarma Smart Scores. With strong scores of 4 in Value, Growth, Resilience, and a commendable score of 3 in Dividend and Momentum, the overall outlook for the company appears promising. The high Value and Growth scores indicate potential for solid financial performance and future growth opportunities. Additionally, the company’s Resilience score suggests a strong ability to weather economic challenges, while the Momentum score hints at a stable performance trend.
Southwest Airlines Co., a leading domestic airline in the United States specializing in short-haul, high-frequency, point-to-point service, showcases a positive outlook based on its Smartkarma Smart Scores. Investors may find the company attractive due to its strong Value, Growth, and Resilience scores, with a reasonable showing in Dividend and Momentum. This suggests that Southwest Airlines Co. is well-positioned to deliver consistent performance over the long term, making it a potentially rewarding investment choice within the airline industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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