The 10-second takeaway
For the quarter ended June 30 (Q2), Southwest Airlines met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share expanded. GAAP earnings per share grew.
Gross margins increased, operating margins dropped, net margins dropped.
Southwest Airlines reported revenue of $4.64 billion. The 10 analysts polled by S&P Capital IQ wanted to see a top line of $4.65 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.38. The 15 earnings estimates compiled by S&P Capital IQ averaged $0.39 per share. Non-GAAP EPS of $0.38 for Q2 were 5.6% higher than the prior-year quarter's $0.36 per share. GAAP EPS of $0.31 for Q2 were 3.3% higher than the prior-year quarter's $0.30 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 25.7%, 20 basis points better than the prior-year quarter. Operating margin was 9.9%, 30 basis points worse than the prior-year quarter. Net margin was 4.8%, 10 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.45 billion. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $17.56 billion. The average EPS estimate is $0.99.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,536 members out of 1,797 rating the stock outperform, and 261 members rating it underperform. Among 406 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 358 give Southwest Airlines a green thumbs-up, and 48 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Southwest Airlines is outperform, with an average price target of $15.18.
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