Southwest Airlines (NYSE:LUV) reported 2013 fourth-quarter net income of $212 million and full-year net income of $754 million this morning, representing gains of 172% and 79%, respectively, over 2012 levels. 2013 was its 41st consecutive year of profitability, and its net income in both the fourth quarter and full year stood at record levels.
"We are extremely proud of these record results and the tremendous progress made on our strategic initiatives, which produced substantial returns and contributed significantly to our superb 2013 financial performance," said Southwest CEO, Board Chairman and President Gary Kelly in the company press release. "Our full year 2013 total operating revenues were a record $17.7 billion, and our cost performance was excellent."
Excluding special items Southwest had a net income of $1.12 per share in the full year of 2013, double that of the $0.56 per share seen in 2012. In the fourth quarter those levels stood at $236 million in 2013 and $65 million in 2012.
In the fourth quarter Southwest's revenue stood at $4.4 billion, representing an increase of 6.1% over the $4.2 billion seen in the fourth quarter of last year. It operating expenses were down 1% year over year, buoyed largely by lower fuel costs, which fell by $138 million, or 9.2%. The Dallas-based airline burned about the same amount of fuel but paid $0.30 less per gallon than a year ago. Meanwhile, the average fare on Southwest rose $8, or 5.4%, to $156.05 each way.
Southwest says it plans to launch international service beginning this year and will open a new international facility in Houston by 2015 which will allow it to fly to the Caribbean, Mexico, Central America, and northern cities in South America. Southwest is absorbing routes to the Caribbean and Latin America now operated by its AirTran affiliate. The company noted the integration of AirTran is progressing as expected, and it achieved $400 million in "synergies" in 2013.
"We enter 2014 financially strong and excited about the opportunities unfolding. We are proud of our many 2013 accomplishments, most notably our strong financial performance that we believe positions us well to achieve our targeted 15 percent ROIC in 2014," concluded Kelly. "As ever, we remain focused on providing job security for our Employees; providing friendly, reliable and low-fare service to our Customers; and enhancing Shareholder value."
-- Material from The Associated Press was used in this report.
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