SWA posts $162 Mil Net Income/ $.22 per share

[The Prussian]

Hey Luckyifyouhadabrain....Southwest prices its product to cover costs and then make a profit, as in any normal business. Nothing has changed in Econ 101 since the dawn of time. Fuel hedging can help to mitigate soaring fuel costs, but in the end the product is priced to cover all those costs, and then make that profit target.

 

[Bally]

Lucky,

You are spitting mad that SWA said that you are not SWA material and you were REJECTED, or you didnt even apply because you know that you would not be hired due to your DUI, lack of college degree, or the fact that you most likely have gone from job to job to job. You therefore hate SWA and hope for their failure.

 

[JetFumes]

Good job guys! Keep raising the fares 10 at a time and we'll all make more. By the way, if the hedges do run out, then no one else will have them either. Doesn't SWA still have the lowest non fuel casm in the industry? Thats what matters.

 

[GFunk20]

$162 mil. profit, oh my god, the writing on the wall for Southwest!!

Everybody resign and I will call the PD immediately to give up my pool date so that we can get ahead of this sinking ship...

Get a life. And re-apply in 1 year.

 

[727C47]

Bravo SWA !, easy on the sour grapes lucky charms

 

[RedDogC130]

I wish I had a link to our latest union paper that explains the study that was done on CASM, fuel hedging, and such for our negotiations. Made my dumba$$ understand it more.

 

[luckytohaveajob]

Lucky, you prove your ignorance on how SWA uses its hedging program. You cannot say hedging was $189M and profits were $162M, therefore we really had a $27M loss. It is not that simple!

You are right. The 4th quarter is the one that matters. But the 2nd and the 3rd are the big ones with the losses in the 1st and 4th.

Poor third quarter results are forward looking indicators.

Nice to see all you SWA cheerleaders are all so thin skinned. It will be easy to skin you alive when times get tough.

Step away from the cool aid.

Take control of you union and send those age 65 guys packing and SWA might be CASM competitive during the next five years.

 

[JumpJetter]

What does Jim Rome say?

SCOREBOARD!

 

[kelbill]

Lucky,

Recall also the ONE TIME costs of $36mil NOT INCLUDED in the $162mil profit, so the real profit was $198mil. Doing some math, even misconstruing the hedges as you have tried, equals a profit no matter how you count it. $198mil is more than your hedge bean count. SWA takes hedging into account when it does its pricing and flight schedule. Take hedging out of the equation, and walllah, we get different fares and a slightly different flight schedule.

By the way CASM, ex-fuel, was flat except for that $36mil one time charges I pointed out above. Sounds like our costs aren't going through the roof after all.

18Oct07 MarketWatch

Fourth-quarter outlook

For the fourth quarter, Southwest has hedged 90% of its estimated fuel consumption, capped at an average crude-equivalent price of $51 a barrel, and now sees its fuel costs rising to $1.80 a share in the fourth quarter.
CEO Gary Kelly said the company has started to slow capacity growth this quarter. Southwest announced plans to trim growth rates in June, with an initiative to add over $1 billion in revenue by 2010 and $10 million to profit in the fourth quarter.
"We will soon announce enhancements to our fare structure and Rapid Rewards frequent flyer program, supported by a new marketing and advertising campaign," he said.
He anticipates fourth-quarter operating unit revenue topping year-ago levels.

Now correct me if I'm wrong, but that is about as much hedging as we've ever done and that oh so important 4th qtr appears to be ready to do well this year. How can the 2007 3rd qtr results be such a bad omen if we made more hedge money in 2006 3rd qtr? Not thin skinned, just not thick headed.

JumpJetter had it right:

SCOREBOARD!

 

[PCL_128]

Doesn't SWA still have the lowest non fuel casm in the industry?

Nope, that title went to AirTran this year. SWA does still have the lowest CASM including fuel, though, thanks to their hedges.