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SWA profits beat expectations by 10%
Profits Fall at Southwest
By Ted Reed
TheStreet.com Staff Reporter
7/18/2007 8:06 AM EDT
Click here for more stories by Ted Reed
Southwest Airlines (LUV - Cramer's Take - Stockpickr) said second-quarter net income declined by 28.6%, due largely to rising fuel costs, while unit revenue dropped 3.4%.
The carrier also said it will offer an unspecified number of employees an early-buyout program.
Southwest reported net income, after adjustments for fuel-hedging programs, of $195 million, or 25 cents a share. Analysts polled by Thomson Financial had estimated earnings of 22 cents.
Revenue rose 5.5% to $2.6 billion, in line with expectations. A year earlier, the carrier earned $273 million, or 33 cents a share.
"The anticipated decline in our year-over-year second-quarter earnings performance reflects a continued rise in fuel costs and difficult unit revenue comparisons," said CEO Gary Kelly, in a prepared statement.
Revenue per available seat mile fell to 10.34 cents. Load factor was a record 82.1%. Cost per available seat mile, excluding fuel, fell 1.2%. But despite extensive fuel-cost hedging, Southwest said its fuel expenses per gallon rose 14.1% from a year earlier.
Looking forward, Southwest said July traffic trends and bookings have been strong, "suggesting unit revenue comparisons for third quarter 2007 will be better year-over-year than second quarter 2007's performance."
However, cost per available seat mile will also climb, the company expects.
The airline forecast capacity growth of 6% in the fourth quarter and the full year 2008, about two points lower than previously planned. In 2008, Southwest will take delivery of 19 aircraft, 15 fewer than has originally been set. During the latest quarter, Southwest repurchased 32 million shares for $464 million.
Profits Fall at Southwest
By Ted Reed
TheStreet.com Staff Reporter
7/18/2007 8:06 AM EDT
Click here for more stories by Ted Reed
Southwest Airlines (LUV - Cramer's Take - Stockpickr) said second-quarter net income declined by 28.6%, due largely to rising fuel costs, while unit revenue dropped 3.4%.
The carrier also said it will offer an unspecified number of employees an early-buyout program.
Southwest reported net income, after adjustments for fuel-hedging programs, of $195 million, or 25 cents a share. Analysts polled by Thomson Financial had estimated earnings of 22 cents.
Revenue rose 5.5% to $2.6 billion, in line with expectations. A year earlier, the carrier earned $273 million, or 33 cents a share.
"The anticipated decline in our year-over-year second-quarter earnings performance reflects a continued rise in fuel costs and difficult unit revenue comparisons," said CEO Gary Kelly, in a prepared statement.
Revenue per available seat mile fell to 10.34 cents. Load factor was a record 82.1%. Cost per available seat mile, excluding fuel, fell 1.2%. But despite extensive fuel-cost hedging, Southwest said its fuel expenses per gallon rose 14.1% from a year earlier.
Looking forward, Southwest said July traffic trends and bookings have been strong, "suggesting unit revenue comparisons for third quarter 2007 will be better year-over-year than second quarter 2007's performance."
However, cost per available seat mile will also climb, the company expects.
The airline forecast capacity growth of 6% in the fourth quarter and the full year 2008, about two points lower than previously planned. In 2008, Southwest will take delivery of 19 aircraft, 15 fewer than has originally been set. During the latest quarter, Southwest repurchased 32 million shares for $464 million.
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