Southwest Guides Q3 Profit Well Below Street on Fuel Spike
LUV sits 61% above its 52-week low of $28.975.
Summary
Southwest Airlines forecast Q3 adjusted EPS of $0.50-$0.75, significantly below the $0.82 consensus, as renewed U.S.-Iran fighting drives fuel costs higher. The guidance overshadows strong travel demand and recent revenue initiatives like assigned seating and extra-legroom offerings. This follows a strong Q1 and upbeat CEO commentary on business travel and fare hikes in recent months, making the profit warning a sharp reversal. The fuel cost surge is a macro headwind that could pressure margins across the sector. Southwest also cut its full-year outlook as fuel expenses weighed on second-quarter profit.
At the time of this announcement, LUV was trading at $46.55 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $23.3B. The 52-week trading range was $28.98 to $55.11. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Reuters.