Southwest Airlines(US:LUV) Prnewswire·2025-10-22 20:22Core Insights - Southwest Airlines reported strong third quarter 2025 financial results, with unit revenues, unit costs, and net income all exceeding expectations, indicating effective execution across the business [1][3][7] Company Highlights - The CEO emphasized substantial progress in the company's transformation, with profitable results and reaffirmation of full year 2025 EBIT guidance [3][4] - The company is currently leading in operational performance according to the Wall Street Journal's airline rankings, reflecting the strength of its strategic plan and execution [3] - The company returned $439 million to shareholders through dividends and share repurchases, demonstrating commitment to shareholder value [7][23] Financial Performance - Third quarter 2025 operating revenues reached a record $6.9 billion, a 1.1% increase year-over-year, driven by better-than-anticipated unit revenues [7][11] - Net income for the third quarter was $54 million, or $0.10 per diluted share, down from $67 million or $0.11 per diluted share in the previous year [7][27] - The company expects fourth quarter 2025 unit revenues to increase by 1% to 3% year-over-year, with capacity up approximately 6% [12][14] Cost Management - The company achieved a year-over-year increase in CASM-X of 2.5%, which was below guidance, indicating effective cost management [15][14] - The company continues to target a $370 million cost reduction for the year, with expectations for fourth quarter CASM-X to be flat to up 1% year-over-year [14][15] Capacity and Fleet Management - Full year 2025 capacity is expected to increase by roughly 1.5%, including adjustments related to extra legroom seating retrofits [18][19] - The company updated its fleet planning to include 53 -8 aircraft deliveries in 2025, up from a prior estimate of 47 [19] Liquidity and Capital Deployment - As of the end of the third quarter 2025, the company had $3.0 billion in cash and cash equivalents, with a fully available revolving credit line of $1.5 billion [23] - Capital expenditures for the third quarter were $678 million, primarily driven by aircraft-related spending [22][23]