Southwest Airways Firm LUV inventory is buying and selling comparatively flat after the corporate reported combined fourth-quarter outcomes.
The working income for the quarter grew enhance of 1.6% year-over-year to $6.931 billion, lacking the consensus of $6.96 billion. Working revenues, excluding particular gadgets, hit $7.0 billion, up 3.3% year-over-year.
Adjusted EPS was $0.56, up from $0.38 final yr, beating the consensus $0.44.
The corporate’ quarterly income efficiency was pushed by sturdy demand, income administration advances, advertising evolution, and community optimization. Shut-in bookings exceeded expectations, particularly throughout the vacation interval.
The airline’s adjusted working earnings rose to $397 million from $182 million a yr in the past. Working bills fell 7.9% YoY to $6.7 billion, primarily as a result of decrease gas prices. Excluding gas, particular gadgets, and profit-sharing, bills rose 6.3% yr over yr.
Additionally Learn: Southwest Airways Lifts This autumn Steerage, Launches $750 Million Inventory Buyback
LUV’s unit income elevated 6.2% YoY, Income passenger miles declined 3.1% Y/Y, Accessible seat miles had been down 4.4% Y/Y, and cargo issue was 79.2% in comparison with 78.2% final yr.
CASM-X rose 11.1% year-over-year, together with a $92 million achieve from a sale-leaseback transaction.
Fourth-quarter financial gas prices averaged $2.42 per gallon, together with $0.07 in premium bills and $0.01 in gas hedge beneficial properties. Gas effectivity improved 1.9% year-over-year, pushed by elevated Boeing 737-8 utilization.
The corporate obtained 3 Boeing 737-8 plane within the fourth quarter, totaling 22 in 2024, exceeding steerage of 20. It ended 2024 with 803 plane after retiring 34 Boeing 737-700s and two Boeing 737-800s, suspending 4 retirements to 2025.
Based mostly on current discussions, the corporate stated it’s optimistic that Boeing can exceed 38 plane deliveries in 2025 and plans to leverage any further deliveries to boost fleet monetization and optimize capital allocation methods.
Southwest Airways ended 2024 with $8.7 billion in money and equivalents, a $1 billion absolutely out there credit score line, and $16.3 billion in unencumbered property, together with $13.3 billion in plane worth.
The corporate held a $2 billion web money place with 43% leverage, returned $680 million to shareholders in 2024, and plans a $750 million accelerated share repurchase in Q1 2025.
Southwest Airways generated an working money stream of $462 million for the fiscal 2024, in comparison with $3.14 billion a yr in the past.
“As we glance ahead, 2025 can be a pivotal yr as we proceed to execute and ship on our ‘Southwest. Even Higher.’ transformational plan, the most important and most complete in our 53-year historical past. To that finish, we just lately reached an amended co-brand settlement with Chase that gives enhanced Cardmember advantages related to our assigned and premium seating initiative and helps the multi-year monetary targets we introduced at Investor Day,” commented Bob Jordan, President and Chief Government Officer.
First-quarter 2025 Steerage: Southwest sees RASM up 5%-7% YoY, ASMs down 2%-3%, CASM-X up 7% to 9%, and Financial gas prices per gallon of $2.50 to $2.60.
2025 Outlook: The corporate expects an working margin, excluding particular gadgets, of three%–5%, ROIC of 5%–8%, and ASMs to extend 1%–2% year-over-year.
2027 Targets: The corporate goals for an working margin, excluding particular gadgets, of ≥10%, ROIC of ≥15%, and ASMs to develop 1%–2% yearly.
Worth Motion: LUV shares are buying and selling decrease by 0.30 at $31.56 on the final examine Thursday.
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