Southwest Airlines Earnings: Here’s Why Investors Don’t Like These Results

Southwest Airlines Co. (NYSE:LUV) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.33%.

Southwest Airlines Co. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 5.56% to $0.38 in the quarter versus EPS of $0.36 in the year-earlier quarter.

Revenue: Rose 0.58% to $4.64 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Southwest Airlines Co. reported adjusted EPS income of $0.38 per share. By that measure, the company missed the mean analyst estimate of $0.38. It missed the average revenue estimate of $4.66 billion.

Quoting Management: I am encouraged by the progress we made in the second quarter – in our operations, in our customer service and in our financial performance,” said Jeff Smisek, CEO of United Continental.

Key Stats (on next page)…

Revenue increased 13.69% from $4.08 billion in the previous quarter. EPS increased 442.86% from $0.07 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.3 to a profit $0.28. For the current year, the average estimate has moved up from a profit of $1 to a profit of $1.01 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

2.33%

More from The Cheat Sheet