Southwest Airlines 3rd-quarter earnings of $241 million beat Wall Street expectations
Matt York / AP
Dallas-based Southwest Airlines, the busiest commercial air carrier at McCarran International Airport, reported its third-quarter earnings Thursday.
Company: Southwest Airlines Co. (NYSE: LUV)
Revenue: $4.55 billion (up 5.5 percent from the third quarter of 2012). An increase in fares and in the number of seats and seat miles powered Southwest’s revenue and earnings ahead of Wall Street expectations.
Earnings: $241 million (up 148.5 percent from the third quarter of 2012). Southwest reported record third-quarter income, due primarily to the integration of AirTran routes into the Southwest system.
Earnings per share: 34 cents (up 161.5 percent from third quarter of 2012). Per-share earnings beat Wall Street expectations by 3 cents.
What it means: The continuation of Southwest’s strategy of integrating AirTran routes — a plan that has had little effect on Las Vegas operations — continues to drive the company.
Las Vegas is expected to play a role in Southwest’s international strategy, although company officials have not detailed what that will be.
Southwest is in the midst of a fleet modernization plan, and the airline added three larger and more efficient Boeing 737 models to replace four older planes during the quarter. Available seat miles, which measures capacity as well as flight segment length, will increase by 2 percent by the end of the year.
Third-quarter fuel costs were down 5.7 percent, driven by lower prices per gallon and increased operating efficiencies.
Southwest paid shareholders $28 million in dividends during the quarter and repurchased $150 million in stock.
Quote: “Our plan to add international capabilities for Southwest in 2014 is on track. We reached an exciting milestone last month with the ground-breaking on Southwest’s first international terminal in our 43-year history. The five-gate facility at Houston’s William P. Hobby Airport, planned to open in 2015, will accommodate Southwest service to potential destinations in the Caribbean, Mexico, Central America and northern South America.” — Southwest Chairman and CEO Gary Kelly