We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Southwest Airlines (LUV) Q2 Earnings & Revenues Top Estimates
Read MoreHide Full Article
Southwest Airlines Co. (LUV - Free Report) reported second-quarter 2023 earnings per share (EPS) of $1.09, which outpaced the Zacks Consensus Estimate of $1.08 but declined 16.2% on a year-over-year basis.
Revenues of $7,037 million beat the Zacks Consensus Estimate of $6,988.7 million and improved 4.6% year over year on solid leisure demand.
Southwest Airlines Co. Price, Consensus and EPS Surprise
Airline traffic, measured in revenue passenger miles, jumped 9.2% year over year to 35.50 billion in the quarter under review. Capacity or available seat miles (ASMs) climbed 14.1% year over year to 42.58 billion. The load factor (percentage of seats filled by passengers) fell to 83.4% from 87.1% in the year-ago quarter.
Passenger revenue per available seat mile (a key measure of unit revenues) descended 8.2% year over year to 15.05 cents. Revenue per available seat mile fell 8.3% to 16.53 cents.
Operating Expenses & Income
In the second quarter, Southwest Airlines incurred an operating income (as reported) of $795 million, down 31.3% year over year. On an adjusted basis (excluding special items), the company reported operating income of $807 million, down 31.2% year over year. Total adjusted operating expenses (excluding profit sharing, special items, fuel and oil expenses) increased 22.6%.
Fuel cost per gallon (inclusive of fuel tax: economic) fell 22.6% to $2.60. Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, oil and profit-sharing expenses, and special items increased 7.5% year over year.
Liquidity
Southwest Airlines ended the second quarter with cash and cash equivalents of $9,158 million compared with $8,359 million at the end of March 2023. As of Jun 30, 2023, the company had long-term debt (less current maturities) of $7,994 million compared with $7,999 million at March 2023-end.
LUV generated $1,416 million of cash from operating activities in the reported quarter, while CapEx was $925 million.
Q3 & Full-Year Outlook
For third-quarter 2023, ASMs are estimated to improve 12% from the year-ago reported figure. Economic fuel costs per gallonare expected to be between $2.55 and $2.65. LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 3.5-6.5% in the third quarter from the comparable period in 2022. Interest expenses are expected to be $63 million in the third quarter.
For 2023, Southwest Airlines continues to expect capacity improvement in the range of 14-15% from the 2022 level. Economic fuel costs per gallon are now estimated to be between $2.70 and $2.80 (prior view: $2.60 and $2.70). CASM, excluding fuel, oil and profit-sharing expenses, and special items, is now anticipated to decrease 1-2% (prior view: down 2-4%) in 2023 from 2022.
Interest expenses are now expected to be $255 million (prior view: $250 million) in 2023. The effective tax rate is still expected to be in the band of 23-24% for the year. Capital expenditures are still anticipated at around $3.5 billion for 2023.
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Southwest Airlines (LUV) Q2 Earnings & Revenues Top Estimates
Southwest Airlines Co. (LUV - Free Report) reported second-quarter 2023 earnings per share (EPS) of $1.09, which outpaced the Zacks Consensus Estimate of $1.08 but declined 16.2% on a year-over-year basis.
Revenues of $7,037 million beat the Zacks Consensus Estimate of $6,988.7 million and improved 4.6% year over year on solid leisure demand.
Southwest Airlines Co. Price, Consensus and EPS Surprise
Southwest Airlines Co. price-consensus-eps-surprise-chart | Southwest Airlines Co. Quote
Operating Statistics
Airline traffic, measured in revenue passenger miles, jumped 9.2% year over year to 35.50 billion in the quarter under review. Capacity or available seat miles (ASMs) climbed 14.1% year over year to 42.58 billion. The load factor (percentage of seats filled by passengers) fell to 83.4% from 87.1% in the year-ago quarter.
Passenger revenue per available seat mile (a key measure of unit revenues) descended 8.2% year over year to 15.05 cents. Revenue per available seat mile fell 8.3% to 16.53 cents.
Operating Expenses & Income
In the second quarter, Southwest Airlines incurred an operating income (as reported) of $795 million, down 31.3% year over year. On an adjusted basis (excluding special items), the company reported operating income of $807 million, down 31.2% year over year. Total adjusted operating expenses (excluding profit sharing, special items, fuel and oil expenses) increased 22.6%.
Fuel cost per gallon (inclusive of fuel tax: economic) fell 22.6% to $2.60. Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, oil and profit-sharing expenses, and special items increased 7.5% year over year.
Liquidity
Southwest Airlines ended the second quarter with cash and cash equivalents of $9,158 million compared with $8,359 million at the end of March 2023. As of Jun 30, 2023, the company had long-term debt (less current maturities) of $7,994 million compared with $7,999 million at March 2023-end.
LUV generated $1,416 million of cash from operating activities in the reported quarter, while CapEx was $925 million.
Q3 & Full-Year Outlook
For third-quarter 2023, ASMs are estimated to improve 12% from the year-ago reported figure. Economic fuel costs per gallonare expected to be between $2.55 and $2.65. LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 3.5-6.5% in the third quarter from the comparable period in 2022. Interest expenses are expected to be $63 million in the third quarter.
For 2023, Southwest Airlines continues to expect capacity improvement in the range of 14-15% from the 2022 level. Economic fuel costs per gallon are now estimated to be between $2.70 and $2.80 (prior view: $2.60 and $2.70). CASM, excluding fuel, oil and profit-sharing expenses, and special items, is now anticipated to decrease 1-2% (prior view: down 2-4%) in 2023 from 2022.
Interest expenses are now expected to be $255 million (prior view: $250 million) in 2023. The effective tax rate is still expected to be in the band of 23-24% for the year. Capital expenditures are still anticipated at around $3.5 billion for 2023.
Currently, Southwest Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.