Southwest Airlines swings to Q1 loss: CEO sees solid profit in Q2

Southwest Airlines Co (NYSE: LUV) on Thursday said its revenue in the fiscal first quarter more than doubled on a year-over-year basis. Shares opened 5.0% up despite a wider-than-expected quarterly loss.

Southwest Airlines Q1 financial highlights

• Lost $278 million versus the year-ago figure of $116 million in net income.
• Per-share loss of 47 cents was much worse than 19 cents of EPS last year.
• Adjusted for one-time items, per-share loss stood at 32 cents in fiscal Q1.
• Revenue shot up 128.8% to $4.69 billion, as per the earnings press release.
• FactSet consensus was 30 cents of per-share loss (adj) on $4.67 billion revenue.

Southwest took a $380 million hit in January and February due to soft bookings and cancellations but March saw a sharp rebound.

Other notable figures and CEO Jordan’s remarks

Other notable figures in the earnings report include a 48.6% increase in capacity, 82% in traffic, while load factor climbed from 64.3% to 77%. Fuel costs averaged at $2.30 a gallon in Q1 and are expected to be much higher ($3.05 to $3.15) in the current fiscal quarter.

For 2022 as a whole, Southwest expects fuel costs to be in the range of $2.75 to $2.85 a gallon. In the earnings press release, CEO Bob Jordan said:

The stock is now up 7.0% for the year.