Southwest Airlines (LUV) Tops Q2 EPS by 3c, Beats on Revenues

Southwest Airlines (NYSE: LUV) reported Q2 EPS of $1.23, $0.03 better than the analyst estimate of $1.20. Revenue for the quarter came in at $5.74 billion versus the consensus estimate of $5.72 billion.

Based on these trends and current bookings, the Company expects its third quarter 2017 year-over-year RASM growth to be approximately one percent, which includes an estimated year-over-year unfavorable impact from the transition to the new reservation system of approximately one point. The Company currently does not expect a significant unfavorable impact from the transition to the new reservation system beyond third quarter 2017. Third quarter 2017 year-over-year RASM comparisons also will be impacted by last July\'s technology outage and the timing of the July 4th holiday in 2017, which roughly offset on a unit basis. Mr. Kelly said, "Considering the complexities of implementing a new reservation system for a company of our size, as well as our significant industry outperformance last year, we are very pleased with our revenue performance, and our goal to grow annual 2017 unit revenues remains intact. We continue to expect the annual incremental benefits from the new reservation system capabilities to ramp up to an estimated $200 million in pretax profits in 2018."

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