Southwest PROFIT 1 QTR - BABY!!!!!!!!

[Echopapa]

It's always a good thing when a for-profit company actually makes a profit. Though I wouldn't break my arm patting myself on the back just yet.

I suppose if almost every other passenger airline is losing money than any profit is seen as a major victory. The reality is that 62M out of a revenue of 2 Billion is not spectacular. In fact 62M is tenous based on the size of SWA. UPS just posted almost 1 B earnings...now thats SPECTACULAR (and I don't even work for them).

I don't say this to be a d!ck...I just get tired of some of the smugness that is shown by a select few, and certainly not all, of the SWA guys.

As of print this news was rewarded with an almost 3% stock price decrease.

 

[Deacon]

SWA will always show a profit as long as they have their hedges in place....not really big news here....without their hedges they don't make money flying airplanes..even GK has admitted this several times

However as someone said their Management has their sh*t together and know how to make the airline profitable

 

[T1bubba]

Those 140 firm orders, 2007-12, are not 'mega-growth' by any stretch. SWA tries to grow at 8-10% during good and bad times. Apparently the smart guys have figured out it is a sustainable rate. Add in the 116 more of options, we're up to 256 for 6 years about 40 per year, which equals just about 8-9% for a current fleet of 445 aircraft. Sounds about right to me.

At some point we'll also start retiring -300's, so not all those deliveries will be for growth. But it is nice to see some options exercised, I was wondering when they would start firming up orders for the next few years.

SWA will always show a profit as long as they have their hedges in place....not really big news here....without their hedges they don't make money flying airplanes..even GK has admitted this several times

So since we are more or less continually buying hedges, I guess you're saying we'll always be profitable? I'm glad you're that confident in our future, but I think there's a lot more to it than that.

 

[RJones]

At some point we'll also start retiring -300's, so not all those deliveries will be for growth.

These aircraft deliveries need a careful examination so as to consider these retiring -300's. I've flown some -300's that seriously need to be retired sooner rather than later.

RJ

 

[firstthird]

originally posted by Echopapa
I suppose if almost every other passenger airline is losing money than any profit is seen as a major victory. The reality is that 62M out of a revenue of 2 Billion is not spectacular. In fact 62M is tenous based on the size of SWA. UPS just posted almost 1 B earnings...now thats SPECTACULAR (and I don't even work for them).

all info off yahoo finance pages.

UPS market cap 89.6 Billion
SWA market cap 13.5 Billion (UPS 7 times bigger than SWA)

UPS p/e 23.6
SWA p/e 24.9 (price to earnings equivalent)

UPS profit margin 9.09%
SWA profit margin 7.23% (not too different)

Now, these are just a few of the numbers. A few other ones show UPS looking quite good compared to SWA, like return on equity, while others show SWA in a better light, forward P/E is higher for SWA than UPS. The point is that a strict "UPS made 995 Million last quarter" doesn't mean much without context of the capital invested in UPS, size of the company, etc.

Like poor Exxon got excoriated for making 13+ billion but they are the largest (second largest?) company in the world and that 13+ billion barely makes them attractive as an investment compared to a UPS or SWA. For long term investors, it is all about return on invested capital when it comes to company performance, not the sheer size of a profit.

Short version for us short bus guys - bigger companies need to make correpsondingly bigger profits to survive in the market place. We're still not where we need to be at SWA but hopefully we are trending positive.

(edited for spelling)

 

[canyonblue]

These aircraft deliveries need a careful examination so as to consider these retiring -300's. I've flown some -300's that seriously need to be retired sooner rather than later.

RJ

You mean 301 and 302 or as I call them The Spirit of Monitor and the Spirt of the Merrimack.

 

[IXLR8]

Heck, if I worked for SWA I'd be feelin' good too!!..you guys are lucky you have a MGT team that knows what they are doing...

 

[Brown Cow]

UPS made almost 1 billion again.........and they're half asleep 60% of the time all the time.

 

[atafan]

and respectfully.

Who cares what UPS does, aren't they a trucking company that has some airplanes that fly for them?

I'm not trying to be be funny just pointing out that SWA made money with flying aircraft within an airline, very difficult these days. UPS made a lot more money moving freight, mostly with trucks. Different business.

All employees should be happy when their company does well, but why all the, "mine's bigger than your's" talk.

 

[Deacon]

At some point we'll also start retiring -300's, so not all those deliveries will be for growth. But it is nice to see some options exercised, I was wondering when they would start firming up orders for the next few years.


So since we are more or less continually buying hedges, I guess you're saying we'll always be profitable? I'm glad you're that confident in our future, but I think there's a lot more to it than that.

pretty much.but... Gk has said this publicly more than once..either way SWA management is way ahead of everyone elses... he still deserves a pat on the back