Southwest Beats Q3 Estimates but Slashes Full-Year EPS Guidance on Fuel Costs
LUV sits 37% above its 52-week low of $29.26.
Summary
Southwest beat Q3 estimates with record revenue of $8.42B (up 21.2% year-over-year) and adjusted EPS of $0.66 versus the $0.58 consensus, while unit revenue rose 21.6%. The catch is fuel: costs jumped $821M year-over-year, an EPS headwind of roughly $1.08, yet operating margins still expanded to 4.5%. Management cut full-year EPS guidance to $2.60-$2.85 from $3.25-$4.25, a sizable reduction, and guided Q4 EPS to $0.55-$0.80 with fuel expected at $4.55 per gallon versus $3.92 in Q3. Q4 unit revenue is guided up 19%-21% year-over-year. Shares were up about 1.1% after hours to $40.30, suggesting the market is focused on the demand strength and beat rather than the guidance cut. The company set a Capital Markets Day for March 2, 2027, where it will lay out a multi-year financial framework.
At the time of this announcement, LUV was trading at $40.20 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $19.5B. The 52-week trading range was $29.26 to $55.11. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: Benzinga.