Southwest Posts Record Q3 Revenue, 21.6% Unit Revenue Jump; Guides Q4 EPS $0.55-$0.80
LUV sits 36% above its 52-week low of $29.26.
Summary
Southwest reported record Q3 revenue of $8.4B with unit revenues up 21.6% and adjusted EPS of $0.66, then guided Q4 adjusted EPS to $0.55-$0.80 against a sharply higher fuel assumption.
Key Events · Earnings and Guidance · LUV
-
Record Q3 Revenue and Unit Revenues
Operating revenue of $8.4B rose 21.2% year-over-year and RASM jumped 21.6% to an all-time record, beating prior guidance on capacity that was down 0.4%.
-
Margins Expand Despite Fuel Headwind
Operating margin was 4.5% (up 4.0 pts) and adjusted operating margin 5.4% (up 4.8 pts) even with $821M more in nominal fuel expense; adjusted EPS was $0.66 versus $0.55 GAAP.
-
Q4 and Full-Year Guidance Set
Q4 adjusted EPS guided to $0.55-$0.80 on RASM +19-21% and CASM-X +4.0-4.5%; full-year 2026 adjusted EPS $2.60-$2.85. Q4 fuel assumed at ~$4.55/gallon versus $3.92 in Q3.
-
Capacity Plan Trimmed
Full-year 2026 capacity growth is now expected at ~1.2%, down from the prior ~1.5%, with 67 Boeing 737-8/737-7 deliveries and ~60 retirements planned.
Analysis · LUV · Energy & Transportation
Southwest delivered a record $8.4B in quarterly revenue and a 21.6% jump in unit revenues, pushing adjusted operating margin up 4.8 points to 5.4% even as fuel costs rose $821M. The quarter shows the commercial overhaul (bag fees, seating, loyalty) is producing durable pricing power rather than a one-off comparison. The catch is the fourth quarter: fuel is guided to ~$4.55/gallon from $3.92, and full-year capacity growth was trimmed to ~1.2% from ~1.5%, so the Q4 EPS range of $0.55-$0.80 and full-year $2.60-$2.85 embed a real cost headwind. Management also set a March 2, 2027 Capital Markets Day to lay out multi-year targets, which is the next scheduled checkpoint for the margin-expansion story.
How filings like this one have moved
In the 30 days to Oct 21, 2026, 28.9% of the 1511 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.54%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, LUV was trading at $39.77 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 filing was assessed with positive market sentiment and an importance score of 7 out of 10.