Q
It's about whether you're profitable, or not. You can tout about a low debt to equity ratio all you want and a history of profitability, but if you post a loss, it doesn't matter much, you still loss money when others were posting profits.
What should have you more concerned is the fact that despite a low debt to equity ratio (very little interest payments) SWA posted a loss in the third quarter, a traditionally profitable quarter. Meanwhile the competition is making money, lowering debt and lowering interest payments. Good luck with your merger, I'm sure SWA will be firing on all cylinders as you integrate a justifiably p.o. workforce.
Careful, FDJ2, you're starting to sound a little like Fubi and OYS. Trust me--you don't want that.
Thanks for your concern, but I personally am not concerned one little bit that "SWA posted a loss in the third quarter, a traditionally profitable quarter." Not in the slightest. You guys have turned this thread (and the sister thread about "the end of SWA" started by one of the biggest knuckleheads on the forum) into a glee-fest about SWA "losing money." Newsflash--we didn't lose any money in the third quarter. Not a dime. In fact we made lots of money flying airplanes, and the fourth quarter looks strong as well.
The "loss" some of you guys gloat over is the result of financial reporting rules. Tell you what--I'll explain it to you the way I explained it to my nephew. Let's say you buy a Rembrandt painting for $1M. We'll say that's what it's worth. Next quarter it's worth $800k on the market. With these rules you'd be required to post a $200k loss, even though you still have the painting and haven't actually "lost" anything. The following quarter, let's say it's worth $1M again. That quarter, you'd post a profit of $200k. However, you still have the asset, and you've nether "made" nor "lost" a single penny until you actually sell the damn thing. Make sense? That's the deal with fuel hedges. The hedges that "lost" money in Q3 (ironically, due to fuel prices decreasing), have already "gained" again (due to oil prices on the rise), and regardless, we still have them (they're longer term), so we haven't actually "gained" or "lost" a damned thing yet.
That's why no one who knows the first thing about money was bothered by this "loss." Because it wasn't a real loss. Despite some FI pundits shouting to the contrary, its means diddly-dick to the actual health and prospects of the company. Less than diddly-dick, actually. Nobody cares. I don't care (because my profit sharing is based only on operating profits, so -I- made extra money in Q3), the company doesn't care, the board doesn't care, and more importantly, Wall Street doesn't care. Wall Street was actually happy that we beat expectations on profit flying planes.
The only people who seem to care are the trolls who like to harp on forums like this, so they have another way to rag on SWA. Well, knock yourselves out... but please realize that people who know about how the real financial world works, know that you're just blowing smoke.
Delta made money flying airplanes this quarter (and year, for that matter). Good for you. I hope you keep it up. However, SWA also made money flying airplanes for the quarter (as usual). Good for us. If a "loss" on fuel hedge fluctuations is the best SWA haters can come up with to rag on us about, than I'd say we're doing pretty good.
Bubba
