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Southwest Airlines has an encouraging earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (matched the mark in the remaining quarter), delivering an average beat of 271.09%.
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 Q3 Performance
The Zacks Consensus Estimate for LUV’s third-quarter 2026 earnings has been revised downward by 11.59% in the past 60 days to 61 cents per share. However, the consensus mark implies more than 100% upside from the year-ago actual. The consensus estimate lies within the company-provided guided range of 50 cents to 75 cents.
Image Source: Zacks Investment Research
We expect high fuel costs to have dented LUV’s bottom-line performance in the September quarter. The ongoing conflict in the Middle East has resulted in a sharp jump in oil prices. This has been naturally hurting the bottom line of airlines because fuel expenses represent a key input cost for airlines. With most U.S. carriers having abandoned fuel hedging strategies, such an oil supply disruption has left them fully exposed to price spikes. The company’s outlook assumed fuel cost per gallon between $3.70 and $3.75 for the third quarter.
Escalated labor and airport costs were high, which is likely to have hurt the company’s bottom-line performance in the September quarter. LUV expects to continue experiencing increased cost pressure from the labor agreements and deals inked with the pilots. We expect operating costs to rise 9.1% in third-quarter 2026 from third-quarter 2025 actuals, due to a 1.5% increase in salaries and related costs.
Management expects third-quarter cost per available seat mile, excluding fuel, special items and profit sharing, to rise 3.5-4%. Dependence on Boeing’s delivery schedule also adds uncertainty to fleet planning and capacity execution.
Despite the sharp rise in jet fuel prices, solid bookings are likely to have aided LUV’s top-line performance in the September quarter. Southwest Airlines continues to benefit from network optimization, disciplined capacity, assigned and extra-legroom seating, bag fees, expanded distribution and better revenue management.
The Zacks Consensus Estimate for LUV’s third-quarter 2026 revenues is pegged at $8.26 billion, indicating 18.83% growth year over year. Management anticipates third-quarter 2026 unit revenues (RASM) to increase in the range of 17.5% to 19.5% on a year-over-year basis, with capacity projected to decline 1% to remain flat year over year. Our estimate for passenger revenues in the to-be-reported quarter indicates an 18.4% increase from third-quarter 2025 actual.
What Our Model Says About LUV
Our proven model does not conclusively predict 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. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Southwest Airlineshas an Earnings ESP of -4.13% and a Zacks Rank #3.
Southwest Airlines reported second-quarter 2026 adjusted earnings of 94 cents per share, up 118.6% year over year and 80.8% above the Zacks Consensus Estimate of 52 cents. Record operating revenues of $8.43 billion rose 16.4% but missed the consensus mark of $8.58 billion by 1.7%.
Results benefited from demand for enhanced products, record managed business revenues and cost discipline despite an $889 million increase in fuel expense. Adjusted unit revenues jumped 20.1%, while adjusted operating margin expanded 3.3 points to 6.7%.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that they have the right combination of elements to beat on earnings this reporting cycle.
ODFL is scheduled to report third-quarter 2026 earnings on Oct. 28. The Zacks Consensus Estimate for third-quarter 2026 earnings has been revised upward by 0.63% over the past 60 days. ODFL’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with an average beat of 6.71%.
C.H. Robinson Worldwide (CHRW - Free Report) has an Earnings ESP of +3.43% and a Zacks Rank #2 at present. CHRW is scheduled to report third-quarter 2026 earnings on Oct. 28.
The Zacks Consensus Estimate for third-quarter 2026 earnings has been revised upward by 1.82% to $1.68 per share over the past 60 days. CHRW’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and met the mark on the other occasion. The average beat is 8.11%.
View the Zacks #1 Rank List
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Southwest Airlines to Report Q3 Earnings: What's in the Cards?
Key Takeaways
Southwest Airlines Co. (LUV - Free Report) is scheduled to report third-quarter 2026 results on Oct. 21, after market close.
Southwest Airlines has an encouraging earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (matched the mark in the remaining quarter), delivering an average beat of 271.09%.
Let’s see how things have shaped up for Southwest Airlines this earnings season.
Factors Likely to Have Influenced LUV’s Q3 Performance
The Zacks Consensus Estimate for LUV’s third-quarter 2026 earnings has been revised downward by 11.59% in the past 60 days to 61 cents per share. However, the consensus mark implies more than 100% upside from the year-ago actual. The consensus estimate lies within the company-provided guided range of 50 cents to 75 cents.
We expect high fuel costs to have dented LUV’s bottom-line performance in the September quarter. The ongoing conflict in the Middle East has resulted in a sharp jump in oil prices. This has been naturally hurting the bottom line of airlines because fuel expenses represent a key input cost for airlines. With most U.S. carriers having abandoned fuel hedging strategies, such an oil supply disruption has left them fully exposed to price spikes. The company’s outlook assumed fuel cost per gallon between $3.70 and $3.75 for the third quarter.
Escalated labor and airport costs were high, which is likely to have hurt the company’s bottom-line performance in the September quarter. LUV expects to continue experiencing increased cost pressure from the labor agreements and deals inked with the pilots. We expect operating costs to rise 9.1% in third-quarter 2026 from third-quarter 2025 actuals, due to a 1.5% increase in salaries and related costs.
Management expects third-quarter cost per available seat mile, excluding fuel, special items and profit sharing, to rise 3.5-4%. Dependence on Boeing’s delivery schedule also adds uncertainty to fleet planning and capacity execution.
Despite the sharp rise in jet fuel prices, solid bookings are likely to have aided LUV’s top-line performance in the September quarter. Southwest Airlines continues to benefit from network optimization, disciplined capacity, assigned and extra-legroom seating, bag fees, expanded distribution and better revenue management.
The Zacks Consensus Estimate for LUV’s third-quarter 2026 revenues is pegged at $8.26 billion, indicating 18.83% growth year over year. Management anticipates third-quarter 2026 unit revenues (RASM) to increase in the range of 17.5% to 19.5% on a year-over-year basis, with capacity projected to decline 1% to remain flat year over year. Our estimate for passenger revenues in the to-be-reported quarter indicates an 18.4% increase from third-quarter 2025 actual.
What Our Model Says About LUV
Our proven model does not conclusively predict 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. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Southwest Airlineshas an Earnings ESP of -4.13% and a Zacks Rank #3.
Southwest Airlines Co. Price and EPS Surprise
Southwest Airlines Co. price-eps-surprise | Southwest Airlines Co. Quote
Highlights of LUV’s Q2 Earnings
Southwest Airlines reported second-quarter 2026 adjusted earnings of 94 cents per share, up 118.6% year over year and 80.8% above the Zacks Consensus Estimate of 52 cents. Record operating revenues of $8.43 billion rose 16.4% but missed the consensus mark of $8.58 billion by 1.7%.
Results benefited from demand for enhanced products, record managed business revenues and cost discipline despite an $889 million increase in fuel expense. Adjusted unit revenues jumped 20.1%, while adjusted operating margin expanded 3.3 points to 6.7%.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that they have the right combination of elements to beat on earnings this reporting cycle.
Old Dominion Freight Line (ODFL - Free Report) has an Earnings ESP of +0.77% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
ODFL is scheduled to report third-quarter 2026 earnings on Oct. 28. The Zacks Consensus Estimate for third-quarter 2026 earnings has been revised upward by 0.63% over the past 60 days. ODFL’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with an average beat of 6.71%.
C.H. Robinson Worldwide (CHRW - Free Report) has an Earnings ESP of +3.43% and a Zacks Rank #2 at present. CHRW is scheduled to report third-quarter 2026 earnings on Oct. 28.
The Zacks Consensus Estimate for third-quarter 2026 earnings has been revised upward by 1.82% to $1.68 per share over the past 60 days. CHRW’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and met the mark on the other occasion. The average beat is 8.11%.