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Southwest Airlines has missed the Zacks Consensus Estimate in two of the preceding four quarters, the average miss being 290.55%. However, the company has outperformed the Zacks Consensus Estimate in the remaining two quarters. The Zacks Consensus Estimate for second-quarter earnings has been revised 8% upward over the past 90 days.
Let’s see how things have shaped up for Southwest Airlines this earnings season.
Q2 Expectations
The Zacks Consensus Estimate for LUV’s second-quarter 2023 revenues is pegged at $6.99 billion, indicating 3.87% year-over-year growth. The top line is likely to have been aided by a solid recovery in domestic and leisure air-travel demand and an improvement in passenger revenues.
On the flip side, escalating fuel prices represent a concern. For second-quarter 2023, economic fuel costs per gallon are now expected to be $2.55 (prior view: $2.45 - $2.55). Our estimate is too pegged at $2.55.
Apart from an increase in fuel costs, a rise in labor and airport costs is also likely to have dented bottom-line growth, resulting in a spike in operating expenses. Due to an increase in labor and airport costs, as well as lower productivity levels, LUV expects CASM, excluding fuel, oil and profit-sharing expenses and special items, to increase 5-8% in the second quarter of 2023 from the comparable period in 2022. Our estimate indicates an increase of 7.3% from second-quarter 2022 actuals.
What Our Model Says
Our proven model predicts an earnings beat for Southwest Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Southwest Airlines has an Earnings ESP of +2.58% and a Zacks Rank #3.
Southwest Airlines reported first-quarter 2023 loss of 27 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents. In the year-ago quarter, LUV had reported a loss of 32 cents per share.
Revenues of $5,706 million lagged the Zacks Consensus Estimate of $5,741.4 million but improved 21.6% year over year.
Other Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their second-quarter 2023 earnings:
Copa Holdings has an expected earnings growth rate of more than 100% for second-quarter 2023. CPA delivered a trailing four-quarter earnings surprise of 14.60%, on average.
The Zacks Consensus Estimate for CPA’s second-quarter 2023 earnings has been revised upward by 94% in the past 90 days.
Alaska Air (ALK - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #3. ALK will release results on Jul 25.
Alaska Air has an expected earnings growth rate of 21% for second-quarter 2023.
The Zacks Consensus Estimate for ALK’s second-quarter 2023 earnings has been revised upward by 36.1% in the past 90 days.
Image: Bigstock
Is a Beat Ahead for Southwest Airlines (LUV) in Q2 Earnings?
Southwest Airlines Co. (LUV - Free Report) is scheduled to report second-quarter 2023 results on Jul 27.
Southwest Airlines has missed the Zacks Consensus Estimate in two of the preceding four quarters, the average miss being 290.55%. However, the company has outperformed the Zacks Consensus Estimate in the remaining two quarters. The Zacks Consensus Estimate for second-quarter earnings has been revised 8% upward over the past 90 days.
Let’s see how things have shaped up for Southwest Airlines this earnings season.
Q2 Expectations
The Zacks Consensus Estimate for LUV’s second-quarter 2023 revenues is pegged at $6.99 billion, indicating 3.87% year-over-year growth. The top line is likely to have been aided by a solid recovery in domestic and leisure air-travel demand and an improvement in passenger revenues.
On the flip side, escalating fuel prices represent a concern. For second-quarter 2023, economic fuel costs per gallon are now expected to be $2.55 (prior view: $2.45 - $2.55). Our estimate is too pegged at $2.55.
Apart from an increase in fuel costs, a rise in labor and airport costs is also likely to have dented bottom-line growth, resulting in a spike in operating expenses. Due to an increase in labor and airport costs, as well as lower productivity levels, LUV expects CASM, excluding fuel, oil and profit-sharing expenses and special items, to increase 5-8% in the second quarter of 2023 from the comparable period in 2022. Our estimate indicates an increase of 7.3% from second-quarter 2022 actuals.
What Our Model Says
Our proven model predicts an earnings beat for Southwest Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Southwest Airlines has an Earnings ESP of +2.58% and a Zacks Rank #3.
Southwest Airlines Co. Price and EPS Surprise
Southwest Airlines Co. price-eps-surprise | Southwest Airlines Co. Quote
Highlights of Q1
Southwest Airlines reported first-quarter 2023 loss of 27 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents. In the year-ago quarter, LUV had reported a loss of 32 cents per share.
Revenues of $5,706 million lagged the Zacks Consensus Estimate of $5,741.4 million but improved 21.6% year over year.
Other Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their second-quarter 2023 earnings:
Copa Holdings, S.A. (CPA - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #2. CPA will release results on Aug 9. You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings has an expected earnings growth rate of more than 100% for second-quarter 2023. CPA delivered a trailing four-quarter earnings surprise of 14.60%, on average.
The Zacks Consensus Estimate for CPA’s second-quarter 2023 earnings has been revised upward by 94% in the past 90 days.
Alaska Air (ALK - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #3. ALK will release results on Jul 25.
Alaska Air has an expected earnings growth rate of 21% for second-quarter 2023.
The Zacks Consensus Estimate for ALK’s second-quarter 2023 earnings has been revised upward by 36.1% in the past 90 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.