We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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 has an encouraging earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average beat of 259.13%.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for Southwest Airlines this earnings season.
Factors Likely to Have Influenced LUV’s Q4 Performance
The Zacks Consensus Estimate for LUV’s fourth-quarter 2025 revenues is pegged at $7.52 billion, indicating 8.47% growth year over year. Management anticipates fourth-quarter 2025 unit revenues to increase in the range of 1% to 3%, on a year-over-year basis, excluding special items, on capacity up almost 6% year over year. This guidance range assumes demand strength remains at current levels through the end of the quarter. LUV anticipates delivering an all-time quarterly record revenue performance in the fourth quarter.
We expect LUV's performance in the to-be-reported quarter to have been boosted by an uptick in total revenues, driven by high passenger revenues, as domestic air-travel demand stabilizes. Upbeat passenger volumes during the Thanksgiving holiday period are likely to have boosted the top-line performance in the to-be-reported quarter. Our estimate for passenger revenues in the to-be-reported quarter indicates a 7.8% increase from fourth-quarter 2024 actual.
On the contrary, the Zacks Consensus Estimate for LUV’s fourth-quarter 2025 earnings has been revised downward by 24.66% to 55 cents per share in the past 60 days. Moreover, the consensus mark implies a decline of 1.79% from the year-ago actual.We expect geopolitical uncertainty, tariff-related pressures and persistent inflation to weigh on LUV’s operations. The ongoing economic uncertainties and the resultant reduction in consumer and corporate confidence, along with the effects of the government shutdown, are likely to have hurt the company’s prospects.
Image Source: Zacks Investment Research
Escalated labor and airport costs are also likely to have been high, which would have hurt the company’s bottom-line performance in the December quarter. Despite costs on aircraft fuel decreasing year over year, LUV expects to continue experiencing increased cost pressure from the labor agreements and deals inked with the pilots. We expect operating costs to increase 5.9% in fourth-quarter 2025 from fourth-quarter 2024 actuals, led by the 7.3% rise in salaries and related costs.
LUV anticipates fourth-quarter 2025 CASM-X to be in the range of up 1.5-2.5%, or flat to up 1% when excluding the impact of expected book gains from fleet transactions in the fourth quarter of both years, on capacity up almost 6%, all on a year-over-year basis. Unit costs continue to be backed by the continuation of inflationary pressures, including those associated with labor contracts ratified in 2024. LUV remains focused on driving efficiencies to offset overall inflationary cost pressures and achieve its multi-year cost reduction targets.
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 +7.27% and a Zacks Rank #2 at present.
Southwest Airlines reported mixed third-quarter 2025 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues lagged the same.
Quarterly earnings of 11 cents per share beat the Zacks Consensus Estimate of 1 cent but declined 26.7% year over year. Revenues of $6.94 billion missed the Zacks Consensus Estimate of $6.96 billion, but improved 1.1% year over year. Passenger revenues (which accounted for 90.8% of the top line) grew 1% year over year to $6.31 billion. Quarterly results benefited from better-than-anticipated unit revenues and unit costs.
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.
Canadian National Railway (CNI - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #3 at present, and is scheduled to report fourth-quarter 2025 results on Jan. 30.
The Zacks Consensus Estimate for fourth-quarter earnings has been revised upward by 1.43% at $1.42 per share over the past 60 days. CNI’s earnings beat the Zacks Consensus Estimate in two of the preceding four quarters and missed twice in the remaining, the average miss was 0.1%.
The Zacks Consensus Estimate for fourth-quarter 2025 earnings has been revised 2.29% upward over the past 60 days. UPS’ earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed in the remaining one, the average beat being 11.2%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Southwest Airlines Stock to Report Q4 Earnings: Is a Beat in Store?
Key Takeaways
Southwest Airlines Co. (LUV - Free Report) is scheduled to report fourth-quarter 2025 results on Jan. 28.
Southwest Airlines has an encouraging earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average beat of 259.13%.
Let’s see how things have shaped up for Southwest Airlines this earnings season.
Factors Likely to Have Influenced LUV’s Q4 Performance
The Zacks Consensus Estimate for LUV’s fourth-quarter 2025 revenues is pegged at $7.52 billion, indicating 8.47% growth year over year. Management anticipates fourth-quarter 2025 unit revenues to increase in the range of 1% to 3%, on a year-over-year basis, excluding special items, on capacity up almost 6% year over year. This guidance range assumes demand strength remains at current levels through the end of the quarter. LUV anticipates delivering an all-time quarterly record revenue performance in the fourth quarter.
We expect LUV's performance in the to-be-reported quarter to have been boosted by an uptick in total revenues, driven by high passenger revenues, as domestic air-travel demand stabilizes. Upbeat passenger volumes during the Thanksgiving holiday period are likely to have boosted the top-line performance in the to-be-reported quarter. Our estimate for passenger revenues in the to-be-reported quarter indicates a 7.8% increase from fourth-quarter 2024 actual.
On the contrary, the Zacks Consensus Estimate for LUV’s fourth-quarter 2025 earnings has been revised downward by 24.66% to 55 cents per share in the past 60 days. Moreover, the consensus mark implies a decline of 1.79% from the year-ago actual.We expect geopolitical uncertainty, tariff-related pressures and persistent inflation to weigh on LUV’s operations. The ongoing economic uncertainties and the resultant reduction in consumer and corporate confidence, along with the effects of the government shutdown, are likely to have hurt the company’s prospects.
Escalated labor and airport costs are also likely to have been high, which would have hurt the company’s bottom-line performance in the December quarter. Despite costs on aircraft fuel decreasing year over year, LUV expects to continue experiencing increased cost pressure from the labor agreements and deals inked with the pilots. We expect operating costs to increase 5.9% in fourth-quarter 2025 from fourth-quarter 2024 actuals, led by the 7.3% rise in salaries and related costs.
LUV anticipates fourth-quarter 2025 CASM-X to be in the range of up 1.5-2.5%, or flat to up 1% when excluding the impact of expected book gains from fleet transactions in the fourth quarter of both years, on capacity up almost 6%, all on a year-over-year basis. Unit costs continue to be backed by the continuation of inflationary pressures, including those associated with labor contracts ratified in 2024. LUV remains focused on driving efficiencies to offset overall inflationary cost pressures and achieve its multi-year cost reduction targets.
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 +7.27% and a Zacks Rank #2 at present.
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 mixed third-quarter 2025 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues lagged the same.
Quarterly earnings of 11 cents per share beat the Zacks Consensus Estimate of 1 cent but declined 26.7% year over year. Revenues of $6.94 billion missed the Zacks Consensus Estimate of $6.96 billion, but improved 1.1% year over year. Passenger revenues (which accounted for 90.8% of the top line) grew 1% year over year to $6.31 billion. Quarterly results benefited from better-than-anticipated unit revenues and unit costs.
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.
Canadian National Railway (CNI - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #3 at present, and is scheduled to report fourth-quarter 2025 results on Jan. 30.
The Zacks Consensus Estimate for fourth-quarter earnings has been revised upward by 1.43% at $1.42 per share over the past 60 days. CNI’s earnings beat the Zacks Consensus Estimate in two of the preceding four quarters and missed twice in the remaining, the average miss was 0.1%.
United Parcel Service (UPS - Free Report) has an Earnings ESP of +1.00% and a Zacks Rank #3 at present. UPS is scheduled to report fourth-quarter 2025 earnings on Jan. 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for fourth-quarter 2025 earnings has been revised 2.29% upward over the past 60 days. UPS’ earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed in the remaining one, the average beat being 11.2%.