DALLAS, Feb. 5, 2025 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) Board of Directors declared a quarterly cash dividend of $.18 per share to Shareholders of record at the close of business on March 12, 2025, on all shares then issued and outstanding. The quarterly dividend will be paid on April 2, 2025. SW-DSR SOURCE Southwest Airlines Co. ...

Financial Data and Key Metrics - Q4 2024 RASM increased by 8% YoY, exceeding prior guidance of 5.5% to 7% [13][27] - Q4 2024 CASM-X increased by 11.1% YoY, driven by inflationary pressures and wage rate increases [50] - Full-year 2024 CASM-X increased by 7.8% YoY, including a $92 million gain from a sale-leaseback transaction [50] - The company expects Q1 2025 RASM to grow 5% to 7% YoY [32] - The company targets $1 billion EBIT contribution from core business initiatives in 2025, excluding fleet transactions [19][70] Business Line Performance - The company achieved industry-leading completion factors with less than 1% of flights canceled in 2024 [26] - Revenue management initiatives yielded faster-than-expected benefits, with flights above 90% load factor showing strong close-in performance [30][31] - The company plans to launch assigned and premium seating in the second half of 2025, with retrofitting starting mid-year [39][40] - Redeye flights will be introduced in 5 key markets in February 2025, expanding to 33 markets by June 2025 [45][46] Market Performance - The company signed its first commercial agreement with Icelandair, expanding customer connectivity across the Atlantic [35][36] - MGM Resorts International was added as a partner for the Getaways by Southwest product, enhancing access to Las Vegas hotel inventory [38] - The company expects revenue contributions from partnerships, Getaways, and loyalty initiatives, particularly in Q4 2025 [34] Strategy and Industry Competition - The Southwest Even Better plan focuses on efficiency, cost reduction, and customer experience enhancements, including redeye flights and faster aircraft turn times [10][11][45] - The company is pursuing a $500 million cost initiative to mitigate inflation and improve efficiency, with a focus on corporate overhead reduction [16][17] - The company is modernizing its fleet, aiming for an all-737-7 and -8 fleet by 2031, with plans to retire 51 aircraft and sell 10 -800NGs in 2025 [56][57] Management Commentary on Operating Environment and Future Outlook - Management highlighted a constructive industry backdrop with strong demand and capacity moderation [14][27] - The company is optimistic about Boeing's production ramp-up, planning conservatively for 38 deliveries in 2025 but expecting upside potential [20][22] - Management emphasized the importance of maintaining a strong balance sheet and delivering shareholder returns through dividends and share repurchases [66][67] Other Important Information - The company achieved ISO certification for IATA operational safety audit, reinforcing its commitment to safety standards [37] - Digital enhancements have reduced call center volumes, improving operational efficiency [47] - The company updated its co-brand agreement with Chase, enabling new benefits related to assigned and premium seating [41][42] Q&A Summary Question: Unit cost cadence for 2025 - The company expects unit cost growth to moderate to low-single digits by Q4 2025, driven by turn and redeye initiatives, labor contract impacts, and cost reduction efforts [82][83] Question: Long-term unit cost growth potential - Management sees potential for low-single-digit CASM-X growth in 2026 and 2027, supported by labor contract certainty and efficiency initiatives [93][94] Question: Fleet monetization strategy - The company plans to execute sales and sale-leasebacks opportunistically, with a focus on NPV-positive transactions [104][105] - The bulk of the EBIT contribution from fleet strategy will come from sales of excess aircraft, dependent on Boeing deliveries [107][108] Question: Revenue management impact - Revenue management initiatives contributed significantly to Q4 2024 RASM growth, with further benefits expected in 2025 [117][118] Question: Industry capacity outlook - Management expects a constructive industry backdrop to persist due to ongoing supply chain constraints and manufacturing challenges [145][146] Question: Premium seating progress - The company is on track to begin selling assigned and premium seating in H2 2025, with retrofitting starting mid-year [39][40][148]

Core Viewpoint - Southwest Airlines Co. reported a strong fourth-quarter performance with earnings per share of 56 cents, exceeding estimates and showing a significant year-over-year improvement of 51.5% [1] Financial Performance - Revenues for the quarter were $6.93 billion, slightly missing the consensus estimate of $6.95 billion, but reflecting a year-over-year increase of 1.6% due to effective tactical actions and strong demand [2] - Operating income was reported at $278 million, a turnaround from an operating loss of $404 million in the same quarter last year, with adjusted operating income at $397 million compared to $182 million previously [5] - Total adjusted operating expenses increased by 6.3% year over year [5] Operating Statistics - Revenue passenger miles decreased by 3.1% year over year to 34.47 billion, while available seat miles fell by 4.4% to 43.53 billion, leading to a load factor increase of 1 percentage point to 79.2% [3] - Passenger revenue per available seat mile (PRASM) grew by 6.2% year over year to 14.49 cents, and revenue per available seat mile (RASM) also increased by 6.2% to 15.92 cents [3][4] Cost and Liquidity - Fuel costs per gallon decreased by 19.3% year over year to $2.42, while consolidated unit cost (CASM) excluding fuel and special items rose by 11.1% [6] - The company ended the quarter with cash and cash equivalents of $7.50 billion, down from $8.50 billion in the previous quarter, and long-term debt remained stable at $5.06 billion [7] Shareholder Returns and Future Outlook - Southwest Airlines returned $680 million to shareholders through dividends and share repurchases in 2024 and announced a $750 million accelerated share repurchase program [8] - For Q1 2025, ASMs are expected to decline by 2%-3%, with economic fuel costs projected between $2.50 and $2.60 per gallon, and RASM anticipated to increase by 5-7% [8] - The company aims for an operating margin of more than 10% by 2027 and expects ROIC to increase by more than 15% [10]

Financial Performance - For the quarter ended December 2024, Southwest Airlines reported revenue of $6.93 billion, an increase of 1.6% year-over-year [1] - EPS for the quarter was $0.56, compared to $0.37 in the same quarter last year, representing a significant increase [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $6.95 billion, resulting in a surprise of -0.23% [1] - The company delivered an EPS surprise of +24.44%, with the consensus EPS estimate being $0.45 [1] Key Metrics - Load factor was 79.2%, below the five-analyst average estimate of 81.8% [4] - Revenue passenger miles (RPMs) totaled 34.47 billion, compared to the four-analyst average estimate of 35.71 billion [4] - Available seat miles (ASMs) were reported at 43.53 billion, slightly below the four-analyst average estimate of 43.7 billion [4] - Passenger revenue per ASM (PRASM) was 14.49 cents, slightly above the average estimate of 14.45 cents [4] - CASM, excluding fuel and oil expenses, special items, and profit-sharing expenses, was 12.19 cents, compared to the four-analyst average estimate of 12.23 cents [4] - Revenue Per Available Seat Mile (RASM) was 15.92 cents, in line with the four-analyst average estimate of 15.9 cents [4] - Fuel costs per gallon were $2.38, below the three-analyst average estimate of $2.58 [4] - Fuel consumed was 531 million gallons, compared to the estimated 534.92 million gallons [4] - Operating Revenues from Passenger services were $6.31 billion, slightly above the six-analyst average estimate of $6.30 billion, reflecting a year-over-year change of +1.6% [4] - Operating Revenues from Other sources were $579 million, below the six-analyst average estimate of $589.87 million, with a year-over-year change of +2.1% [4] - Operating Revenues from Freight were $45 million, below the six-analyst average estimate of $48.40 million, with a year-over-year change of +2.3% [4] Stock Performance - Shares of Southwest Airlines have returned -5.9% over the past month, while the Zacks S&P 500 composite has changed by +1.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Southwest Airlines reported quarterly earnings of $0.56 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and showing an increase from $0.37 per share a year ago, representing an earnings surprise of 24.44% [1][2] Financial Performance - The company posted revenues of $6.93 billion for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.23%, compared to $6.82 billion in the same quarter last year [2] - Over the last four quarters, Southwest has surpassed consensus EPS estimates three times and topped revenue estimates two times [2] Stock Performance - Southwest shares have declined approximately 5.9% since the beginning of the year, while the S&P 500 has gained 2.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.12 on revenues of $6.59 billion, and for the current fiscal year, it is $1.54 on revenues of $29.14 billion [7] Industry Outlook - The Transportation - Airline industry is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

Financial Performance - Fourth quarter 2024 net income was $261 million, or $0.42 per diluted share, while full year net income was $465 million, or $0.76 per diluted share[2]. - Record fourth quarter operating revenues reached $6.9 billion, a 1.6% increase year-over-year, and full year operating revenues totaled $27.5 billion[10]. - Operating income for Q4 2024 was $278 million, a significant recovery from a loss of $404 million in Q4 2023[40]. - Net income for the year ended December 31, 2024, was $465 million, unchanged from the previous year[40]. - Basic net income per share for Q4 2024 was $0.44, compared to a loss of $0.42 per share in Q4 2023[40]. - The company reported a significant increase in operating income, excluding special items, to $397 million in Q4 2024, up 118.1% from $182 million in Q4 2023[41]. - The company reported a net income, excluding special items, of $356 million for the three months ended December 31, 2024, representing a 50.2% increase from $237 million in the same period of 2023[42]. - Total income before income taxes, excluding special items, was $455 million for the three months ended December 31, 2024, a 47.2% increase from $309 million in the prior year[42]. Revenue and Expenses - Total operating revenues for Q4 2024 reached $6,931 million, a 1.6% increase from $6,822 million in Q4 2023[40]. - Passenger revenue increased by 1.5% to $6,307 million in Q4 2024, compared to $6,211 million in Q4 2023[40]. - Total operating expenses decreased by 7.9% to $6,653 million in Q4 2024, down from $7,226 million in Q4 2023[40]. - Operating revenues, excluding special items, increased by 3.3% to $7,047 million in Q4 2024[41]. - Operating expenses, excluding fuel and oil expense and special items, rose by 6.3% to $5,307 million in Q4 2024[41]. - Fuel and oil expense, as reported, decreased by 25.8% to $1,264 million in Q4 2024, compared to $1,703 million in Q4 2023[40]. - Operating expenses per ASM, excluding fuel and oil expenses, increased to 12.19 cents for the three months ended December 31, 2024, an 11.1% increase from 10.97 cents in the previous year[43]. Shareholder Returns - The company returned $680 million to shareholders in 2024 through dividends and share repurchases[2]. - The Company returned $680 million to its shareholders in 2024, which included $430 million in dividends and $250 million in share repurchases[29]. - The Company plans to launch an additional $750 million accelerated share repurchase program in the first quarter of 2025[29]. Capital Expenditures and Debt - Full year 2024 capital expenditures were $2.1 billion, with 2025 capital spending estimated between $2.5 billion and $3.0 billion[22]. - The Company paid $1.3 billion during 2024 to retire debt and finance lease obligations, including the early redemption of its $1.3 billion outstanding 5.25% Notes due 2025[29]. - Total debt, including finance leases, decreased to $6,699 million as of December 31, 2024, from $8,007 million in 2023[65]. - Adjusted debt as of December 31, 2024, was $7,801 million, down from $8,957 million in 2023[65]. - Leverage ratio (adjusted debt to invested capital) improved to 43% in 2024 from 46% in 2023[65]. Operational Metrics - Fourth quarter revenues per available seat mile (RASM), excluding special items, increased by 8.0% year-over-year[10]. - For Q1 2025, RASM is expected to increase by 5% to 7% year-over-year, while available seat miles (ASMs) are projected to decrease by 2% to 3%[4]. - The company anticipates a 7% to 9% increase in CASM-X year-over-year for Q1 2025, driven by inflationary pressures and capacity moderation efforts[18]. - Revenue passengers carried decreased by 5.2% to 34,126,000 in Q4 2024 compared to Q4 2023[48]. - Average passenger fare increased by 7.1% to $184.81 in Q4 2024 compared to $172.60 in Q4 2023[48]. - Load factor improved by 1.0 percentage points to 79.2% in Q4 2024 compared to 78.2% in Q4 2023[48]. - Available seat miles decreased by 4.4% to 43,533 million in Q4 2024 compared to Q4 2023[48]. - Fuel consumed decreased by 6.0% to 531 million gallons in Q4 2024 compared to Q4 2023[48]. Cash Position - The Company ended 2024 with $8.7 billion in cash and cash equivalents and short-term investments, along with a fully available revolving credit line of $1.0 billion[29]. - Cash and cash equivalents at the end of the period were $7,509 million, down from $9,288 million at the end of 2023[56]. - The company reported a gain on sale-leaseback transactions of $871 million for the year ended December 31, 2024[56]. - The company incurred a loss on extinguishment of debt amounting to $2 million for the year ended December 31, 2024[56]. Future Outlook - The company is currently 51% hedged for fuel consumption in Q1 2025, with a maximum hedged percentage of 47% for the full year 2025[14]. - The Company has 63 remaining contractual but undelivered aircraft for 2024, consisting of 27 -7s and 36 -8s, and anticipates 73 contractual deliveries in 2025[25]. - The Company is currently using a planning assumption of 38 -8 aircraft deliveries in 2025[25]. - The Company has a total of 694 firm orders and options in its previous 737 order book as of October 24, 2024[26]. - The company aims to exceed its 2027 cost reduction target of $500 million, supporting a 2025 CASM-X exit rate in the low-single digits[1]. Recognition and Awards - The company was recognized as the 1 Airline for Economy Class Customer Satisfaction in the J.D. Power 2024 North America Airline Satisfaction Study for the third consecutive year[29].

Core Viewpoint - Southwest Airlines Co. (LUV) is expected to report its fourth-quarter 2024 results on January 30, with positive earnings estimates and growth indicators despite facing some operational challenges [1]. Financial Performance - The Zacks Consensus Estimate for LUV's fourth-quarter 2024 earnings has been revised upward by 21.6% to 45 cents per share, indicating a 21.62% growth from the previous year [2]. - LUV has surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings beat of 111.62% [3]. Revenue Insights - The revenue estimate for LUV's fourth-quarter 2024 is set at $6.95 billion, reflecting a year-over-year growth of 1.84%, supported by strong leisure demand and yield strength [4]. - LUV anticipates its revenue per available seat mile (RASM) to increase by 5.5%-7% year-over-year, an improvement from the previous forecast of 3.5%-5.5% [5]. Operational Factors - The growth in unit revenues is attributed to consistent travel demand and effective revenue management strategies, including network optimization and capacity rationalization [6]. - However, production delays at Boeing, increased labor and airport costs, and higher fuel expenses are expected to impact LUV's bottom line, with CASM (excluding fuel and other costs) projected to rise by 11-13% compared to the previous year [7]. Fuel Cost Projections - The expected economic fuel cost per gallon for the fourth quarter is now between $2.35 and $2.45, up from the prior estimate of $2.25 to $2.35, which poses a challenge for profitability [8]. Earnings Prediction - The model predicts an earnings beat for Southwest Airlines, supported by a positive Earnings ESP of +6.78% and a Zacks Rank of 2 (Buy) [9].

Core Viewpoint - Southwest Airlines (LUV) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Recent Performance of Southwest Airlines - For the fiscal year ending December 2024, Southwest is expected to earn $0.84 per share, reflecting a decrease of 46.5% from the previous year [7]. - Over the past three months, the Zacks Consensus Estimate for Southwest has increased by 4.2%, indicating a positive trend in earnings estimates [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade of Southwest to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].

Core Points - Southwest Airlines Co. will host a live webcast to discuss its fourth quarter and full year 2024 financial results [1] - The webcast is scheduled for January 30, 2025, at 12:30 PM Eastern Time [1] - Key executives participating in the call include Bob Jordan (President and CEO), Andrew Watterson (COO), Ryan Green (Chief Transformation Officer), and Tammy Romo (CFO) [1] Access Information - The webcast can be accessed through the company's investor relations website or the main Southwest Airlines website [1] - Registration for the event will begin 20 minutes prior to the start of the call [1]

Core Viewpoint - Rosen Law Firm is investigating potential breaches of fiduciary duties by the directors and officers of Southwest Airlines Co. related to the company's information technology infrastructure, which may impact its business operations and stock price [1]. Group 1 - The investigation focuses on the impact of Southwest Airlines' information technology infrastructure on its business and stock performance [1]. - The law firm is reaching out to current shareholders of Southwest Airlines for further information and potential involvement in the investigation [2]. - Rosen Law Firm has a strong track record in representing investors, having achieved significant settlements in securities class actions and shareholder derivative litigation [3].