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Southwest Airlines Q3 Earnings & Revenues Top Estimates
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Southwest Airlines Co. (LUV - Free Report) reported third-quarter 2024 earnings of 15 cents per share, which outpaced the Zacks Consensus Estimate of 5 cents but declined 60.5% from the year-ago reported quarter.
Find the latest EPS estimates and surprises on ZacksEarnings Calendar.
Revenues of $6.87 billion surpassed the Zacks Consensus Estimate of $6.79 billion and improved 5.3% year over year. The uptick resulted from improvements in capacity moderation across the industry and progress in managing tactical initiatives to drive results.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 3.1% year over year to 36.73 billion in the quarter under review. Capacity or available seat miles (ASMs) climbed 2.4% year over year to 45.21 billion.As traffic outpaced capacity expansion, load factor (percentage of seat occupancy) grew 0.5 percentage points to 81.2%. Our estimate is pegged at 81%.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) grew 3.3% year over year to 13.82 cents.
Revenue per available seat mile (RASM) grew 2.8% year over year to 15.19 cents.
Operating Expenses & Income
In the third quarter, Southwest Airlines incurred an operating income (as reported) of $38 million compared with $117 million in the year-ago reported quarter. On an adjusted basis (excluding special items), the company reported an operating income of $32 million compared with $224 million in the year-ago reported quarter.
Total adjusted operating expenses (excluding profit sharing, special items, fuel and oil expenses) increased 14.3% year over year.
Fuel cost per gallon (inclusive of fuel tax: economic) fell 8.3% year over year to $2.55.
Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, oil and profit-sharing expenses, and special items grew 11.6% year over year.
Southwest Airlines Co. Price, Consensus and EPS Surprise
Southwest Airlines ended the third quarter with cash and cash equivalents of $8.50 billion compared with $8.14 billion at the prior-quarter end. As of Sept. 30, 2024, the company had long-term debt (less current maturities) of $5.07 billion compared with $5.06 billion at the end of the prior quarter.
LUV generated $113 million of cash from operating activities in the reported quarter, while capital expenditures were $517 million.
Under the $2.5 billion share repurchase program authorized by LUV’s board of directors in September 2024, LUV plans to launch an initial $250 million accelerated share repurchase (ASR) program as early as possible (fourth quarter 2024 ASR program). Subsequent to the launch of the fourth quarter 2024 ASR program, $2.25 billion will be available under the recently authorized $2.5 billion share repurchase program.
Q4 Outlook
For fourth-quarter 2024, ASMs are estimated to decline 4% from the year-ago reported figure. Economic fuel costs per gallonare expected to be in the range of $2.25-$2.35. RASM is anticipated to be up 3.5% to 5.5% from the year-ago reported figure.
LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 11-13% in the fourth quarter from the comparable period in 2023. Interest expenses are expected to be $62 million in the fourth quarter.
Delta Air Lines (DAL - Free Report) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis, mainly due to high labor costs.
Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
Total operating revenues of $3.07 billionsurpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The downfall was owing to a 5% and 6% decrease in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decline in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS), respectively, and 6% fewer stops in Final Mile Services (FMS). These were partially offset by JBI load growth of 5%, which included growth in both the transcontinental and eastern networks and a 3% increase in revenue per load in ICS. Total operating revenue, excluding fuel surcharge revenue, decreased less than 1% from the year-ago reported quarter.
United Airlines Holdings, Inc. (UAL - Free Report) reported third-quarter 2024 EPS (excluding 43 cents from non-recurring items) of $3.33, which surpassed the Zacks Consensus Estimate of $3.10. Earnings decreased 8.8% on a year-over-year basis.
Operating revenues of $14.84 billion beat the Zacks Consensus Estimate of $14.76 billion. The top line increased 2.5% year over year due to upbeat air-travel demand. This was driven by a 1.6% rise in passenger revenues (which accounted for 91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year.
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Southwest Airlines Q3 Earnings & Revenues Top Estimates
Southwest Airlines Co. (LUV - Free Report) reported third-quarter 2024 earnings of 15 cents per share, which outpaced the Zacks Consensus Estimate of 5 cents but declined 60.5% from the year-ago reported quarter.
Find the latest EPS estimates and surprises on ZacksEarnings Calendar.
Revenues of $6.87 billion surpassed the Zacks Consensus Estimate of $6.79 billion and improved 5.3% year over year. The uptick resulted from improvements in capacity moderation across the industry and progress in managing tactical initiatives to drive results.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 3.1% year over year to 36.73 billion in the quarter under review. Capacity or available seat miles (ASMs) climbed 2.4% year over year to 45.21 billion.As traffic outpaced capacity expansion, load factor (percentage of seat occupancy) grew 0.5 percentage points to 81.2%. Our estimate is pegged at 81%.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) grew 3.3% year over year to 13.82 cents.
Revenue per available seat mile (RASM) grew 2.8% year over year to 15.19 cents.
Operating Expenses & Income
In the third quarter, Southwest Airlines incurred an operating income (as reported) of $38 million compared with $117 million in the year-ago reported quarter. On an adjusted basis (excluding special items), the company reported an operating income of $32 million compared with $224 million in the year-ago reported quarter.
Total adjusted operating expenses (excluding profit sharing, special items, fuel and oil expenses) increased 14.3% year over year.
Fuel cost per gallon (inclusive of fuel tax: economic) fell 8.3% year over year to $2.55.
Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, oil and profit-sharing expenses, and special items grew 11.6% year over year.
Southwest Airlines Co. Price, Consensus and EPS Surprise
Southwest Airlines Co. price-consensus-eps-surprise-chart | Southwest Airlines Co. Quote
Liquidity
Southwest Airlines ended the third quarter with cash and cash equivalents of $8.50 billion compared with $8.14 billion at the prior-quarter end. As of Sept. 30, 2024, the company had long-term debt (less current maturities) of $5.07 billion compared with $5.06 billion at the end of the prior quarter.
LUV generated $113 million of cash from operating activities in the reported quarter, while capital expenditures were $517 million.
Under the $2.5 billion share repurchase program authorized by LUV’s board of directors in September 2024, LUV plans to launch an initial $250 million accelerated share repurchase (ASR) program as early as possible (fourth quarter 2024 ASR program). Subsequent to the launch of the fourth quarter 2024 ASR program, $2.25 billion will be available under the recently authorized $2.5 billion share repurchase program.
Q4 Outlook
For fourth-quarter 2024, ASMs are estimated to decline 4% from the year-ago reported figure. Economic fuel costs per gallonare expected to be in the range of $2.25-$2.35. RASM is anticipated to be up 3.5% to 5.5% from the year-ago reported figure.
LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 11-13% in the fourth quarter from the comparable period in 2023. Interest expenses are expected to be $62 million in the fourth quarter.
LUV’s Zacks Rank
Currently, Southwest Airlines carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis, mainly due to high labor costs.
Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
Total operating revenues of $3.07 billionsurpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The downfall was owing to a 5% and 6% decrease in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decline in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS), respectively, and 6% fewer stops in Final Mile Services (FMS). These were partially offset by JBI load growth of 5%, which included growth in both the transcontinental and eastern networks and a 3% increase in revenue per load in ICS. Total operating revenue, excluding fuel surcharge revenue, decreased less than 1% from the year-ago reported quarter.
United Airlines Holdings, Inc. (UAL - Free Report) reported third-quarter 2024 EPS (excluding 43 cents from non-recurring items) of $3.33, which surpassed the Zacks Consensus Estimate of $3.10. Earnings decreased 8.8% on a year-over-year basis.
Operating revenues of $14.84 billion beat the Zacks Consensus Estimate of $14.76 billion. The top line increased 2.5% year over year due to upbeat air-travel demand. This was driven by a 1.6% rise in passenger revenues (which accounted for 91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year.