Core Insights - Southwest Airlines Co. reported mixed third-quarter 2025 results, with earnings surpassing estimates but revenues falling short [1] - Quarterly earnings were 11 cents per share, beating the Zacks Consensus Estimate of 1 cent, but down 26.7% year over year [1] - Revenues reached $6.94 billion, missing the Zacks Consensus Estimate of $6.96 billion, but showing a 1.1% year-over-year improvement [1] Financial Performance - The airline's operating income for the third quarter was $35 million, down from $38 million year over year, but adjusted operating income rose to $42 million from $32 million [6] - Total adjusted operating expenses increased by 3.4% in the third quarter of 2025 [6] - Fuel cost per gallon decreased by 5.9% year over year to $2.40 [7] Operational Metrics - Airline traffic, measured in revenue passenger miles, fell by 1% year over year to 36.36 billion [4] - Capacity, measured in available seat miles (ASMs), grew by 0.8% year over year to 45.56 billion [4] - Load factor decreased by 1.4 percentage points to 79.8% [4] Revenue Metrics - Passenger revenue per available seat mile (PRASM) increased by 0.2% year over year to 13.85 cents [4] - Revenue per available seat mile (RASM) grew by 0.4% year over year to 15.25 cents [5] Liquidity and Capital Expenditures - As of the end of the third quarter, cash and cash equivalents were $2.90 billion, down from $3.47 billion in the previous quarter [10] - Capital expenditures for the third quarter were $678 million, primarily due to aircraft-related spending [11] - The company returned $439 million to shareholders, including $189 million in dividends and $250 million in share repurchases [11] Future Outlook - Southwest anticipates fourth-quarter 2025 unit revenues to increase by 1-3% year over year, with capacity expected to rise by almost 6% [12] - The company expects to achieve a cost reduction target of $370 million for the year [13] - 2025 capital spending is projected to be between $2.5 billion and $3.0 billion [15] - The earnings before interest and taxes (EBIT) guidance for 2025 remains between $600 million and $800 million [16]