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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for LUV’s fourth-quarter 2024 earnings has been revised upward by 21.6% in the past 90 days to 45 cents per share. Moreover, the consensus mark implies 21.62% growth from the year-ago actuals.
Southwest Airlines has surpassed the Zacks Consensus Estimate in three of the preceding four quarters, the average beat being 111.62%. However, the company missed the Zacks Consensus Estimate in one quarter and met the mark in the remaining quarter.
Let’s see how things have shaped up for LUV this earnings season.
Factors Likely to Have Influenced LUV’s Q4 Performance
The Zacks Consensus Estimate for LUV’sfourth-quarter 2024 revenues is pegged at $6.95 billion, indicating 1.84% year-over-year growth. The top line is likely to have been aided by healthy leisure demand and continued yield strength.
Backed by this uptick, LUV now anticipates its fourth-quarter revenue per available seat mile (RASM or unit revenues) to increase in the range of 5.5%-7% on a year-over-year basis. This marks an improvement from the previous forecast of growth of 3.5% to 5.5%. The upside was driven by improving industry demand trends and the company's revenue management techniques.
The solid growth in unit revenues is backed by consistent travel demand and benefits from the successful execution of tactical actions (which include improving network optimization and capacity rationalization, marketing and distribution evolution, and continued efforts to advance revenue management techniques). As part of its growth strategy, LUV is also focused on its cost-cutting initiatives and fleet-modernization techniques.
On the flip side, production delays at Boeing have been hurting the fleet-related plans of LUV. Escalated labor and airport costs and higher fuel expenses also act as headwinds for LUV's bottom-line growth. For fourth-quarter 2024, LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 11-13% from the comparable period in 2023.
Economic fuel cost per gallon for the fourth quarter is now expected to be in the range of $2.35-$2.45 (prior view: $2.25 to $2.35). Our estimate is pegged at $2.44. Higher fuel costs do not bode well for the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
What Our Model Says About LUV
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 +6.78% and a Zacks Rank #2.
Southwest Airlines 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.
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 solid demand trends, quarterly record passengers carried, higher passenger revenues, and ancillary revenues. Further, managed business revenues continued to improve on a year-over-year basis.
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 earnings this reporting cycle.
The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised 7.7% upward in the past 90 days. CHRW’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 10.3%.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank #3 at present. NSC is set to release fourth-quarter results on Jan. 29.
The Zacks Consensus Estimate for fourth-quarter 2024 earnings has moved 32.2% north in the past 90 days. NSC’s earnings surpassed the Zacks Consensus Estimate in two of the preceding four quarters and missed twice, delivering an average surprise of 1.58%.
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Is a Beat in the Cards for Southwest Airlines in Q4 Earnings?
Southwest Airlines Co. (LUV - Free Report) is scheduled to report fourth-quarter 2024 results on Jan. 30.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for LUV’s fourth-quarter 2024 earnings has been revised upward by 21.6% in the past 90 days to 45 cents per share. Moreover, the consensus mark implies 21.62% growth from the year-ago actuals.
Southwest Airlines has surpassed the Zacks Consensus Estimate in three of the preceding four quarters, the average beat being 111.62%. However, the company missed the Zacks Consensus Estimate in one quarter and met the mark in the remaining quarter.
Let’s see how things have shaped up for LUV this earnings season.
Factors Likely to Have Influenced LUV’s Q4 Performance
The Zacks Consensus Estimate for LUV’sfourth-quarter 2024 revenues is pegged at $6.95 billion, indicating 1.84% year-over-year growth. The top line is likely to have been aided by healthy leisure demand and continued yield strength.
Backed by this uptick, LUV now anticipates its fourth-quarter revenue per available seat mile (RASM or unit revenues) to increase in the range of 5.5%-7% on a year-over-year basis. This marks an improvement from the previous forecast of growth of 3.5% to 5.5%. The upside was driven by improving industry demand trends and the company's revenue management techniques.
The solid growth in unit revenues is backed by consistent travel demand and benefits from the successful execution of tactical actions (which include improving network optimization and capacity rationalization, marketing and distribution evolution, and continued efforts to advance revenue management techniques). As part of its growth strategy, LUV is also focused on its cost-cutting initiatives and fleet-modernization techniques.
On the flip side, production delays at Boeing have been hurting the fleet-related plans of LUV. Escalated labor and airport costs and higher fuel expenses also act as headwinds for LUV's bottom-line growth. For fourth-quarter 2024, LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 11-13% from the comparable period in 2023.
Economic fuel cost per gallon for the fourth quarter is now expected to be in the range of $2.35-$2.45 (prior view: $2.25 to $2.35). Our estimate is pegged at $2.44. Higher fuel costs do not bode well for the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
What Our Model Says About LUV
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 +6.78% and a Zacks Rank #2.
Southwest Airlines Co. Price and EPS Surprise
Southwest Airlines Co. price-eps-surprise | Southwest Airlines Co. Quote
Highlights of LUV's Q3 Earnings
Southwest Airlines 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.
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 solid demand trends, quarterly record passengers carried, higher passenger revenues, and ancillary revenues. Further, managed business revenues continued to improve on a year-over-year basis.
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 earnings this reporting cycle.
C.H. Robinson (CHRW - Free Report) has an Earnings ESP of +5.71% and a Zacks Rank #2 at present. CHRW is scheduled to report fourth-quarter 2024 earnings on Jan. 29. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised 7.7% upward in the past 90 days. CHRW’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 10.3%.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank #3 at present. NSC is set to release fourth-quarter results on Jan. 29.
The Zacks Consensus Estimate for fourth-quarter 2024 earnings has moved 32.2% north in the past 90 days. NSC’s earnings surpassed the Zacks Consensus Estimate in two of the preceding four quarters and missed twice, delivering an average surprise of 1.58%.