Southwest Airlines Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Southwest Airlines (NYSE:LUV) will unveil its latest earnings tomorrow, Thursday, January 24, 2013. Southwest Airlines is a passenger airline that provides air transportation in the United States.

Southwest Airlines Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 7 cents per share, a decline of 22.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 10 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 7 cents during the last month. Analysts are projecting profit to rise by 23.3% versus last year to 53 cents.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting net income of 13 cents per share against a mean estimate of profit of 12 cents per share.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

A Look Back: In the third quarter, the company swung to a profit of $16 million (2 cents a share) from a loss of $140 million (18 cents) a year earlier, beating analyst estimates. Revenue was unchanged at $4.31 billion.

Here’s how Southwest Airlines traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

LUV

Wall St. Revenue Expectations: Analysts are projecting a rise of 2.7% in revenue from the year-earlier quarter to $4.22 billion.

Analyst Ratings: There are eight out of 14 analysts surveyed (57.1%) rating Southwest Airlines a buy. Over the last three months, the stock’s average rating has increased from hold to moderate buy.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 31.9% in the fourth quarter of the last fiscal year, 28.6% in the first quarter and 11.6%in the second quarter before dropping in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.94 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations.

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 by Xignite Financials. Earnings estimates provided by Zacks)