Southwest Airlines stock slides lower on mixed Q4 report

Investing.com -- Southwest Airlines (NYSE: LUV) shares fell around 3% in premarket trading Thursday after the company reported fourth-quarter earnings above analyst estimates, but the revenue came in short.

The carrier posted Q4 earnings per share (EPS) of $0.56, topping the consensus estimates of $0.46.

Operating revenue for the quarter totaled $6.93 billion, just below the expected $6.95 billion. Passenger revenue reached $6.31 billion, also shy of the $6.32 billion forecast.

Southwest reported an adjusted operating income of $397 million, above the $312.9 million projected by analysts.

Available seat miles for the three-month period stood at 43.53 billion, compared with expectations of 43.69 billion. Revenue passenger miles were 34.47 billion, below the estimated 35.78 billion.

“We closed out 2024 with positive momentum from our revenue initiatives and the performance of our operation,” said Bob Jordan, President, CEO, and Vice Chairman of the Board of Directors said in a statement.

“We are working to accelerate and exceed our 2027 $500 million cost reduction target, supporting a 2025 CASM-X exit rate in the low-single digits,” he added.

Alongside results, Southwest announced a $750 million accelerated share repurchase plan, with the initial $250 million share repurchase now complete.

For the first quarter of 2025, the company expects operating revenue per available seat mile to increase between 5% and 7% year-over-year. Available seat miles are projected to decline by 2% to 3% over the same period.

For the full year 2025, the airline anticipates available seat miles to rise by 1% to 2% and adjusted operating income to increase between 3% and 5%.

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