A Southwest Airlines jet approaches Chicago’s Midway Airport on December 15, 2023. (John J. Kim/Chicago Tribune/Tribune News Service via Getty Images)
John J. Kim | Chicago Tribune | Getty Images
southwest airlines announced Wednesday that it posted a surprise third-quarter profit and expects record sales in the final three months of the year thanks to improved travel demand and fare increases.
The company said it expects unit revenue to increase 1% to 3% in the fourth quarter and capacity to increase 6% year over year.
“This guidance range assumes demand strength remains at current levels through the end of the quarter,” Southwest said.
Here’s how Southwest Airlines’ performance for the year ended September 30 compared to Wall Street expectations, according to LSEG consensus estimates.
Earnings per share: 11 cents adjusted, 3 cents expected Lost earnings: $6.95 billion, $6.92 billion expected
In July, Southwest Airlines joined other airlines in lowering its 2025 profit forecast. The Dallas airline said it expects pretax profit to be between $600 million and $800 million, up from its previous estimate of $1.7 billion. It reaffirmed its earnings outlook on Wednesday.
The company is working to better compete with competitors and increase sales, abandoning long-standing policies such as empty seats and two free checked bags per traveler.
Tom Doxey, Southwest Airlines’ chief financial officer, said in an interview with CNBC that the revenue boost from seat reservation sales will be seen in the first quarter, when the first flights with empty seats begin.
Southwest Airlines’ third-quarter profit fell more than 19% from a year earlier, from $67 million to $54 million. On a per-share basis, Southwest’s earnings fell to 10 cents from 11 cents a year earlier.
Adjusted for one-time items, Southwest reported third-quarter profit of $58 million, or 11 cents per share.
Sales increased 1% year-on-year to $6.95 billion.
