The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Southwest Airlines met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share grew.
Gross margins dropped, operating margins dropped, net margins expanded.
Southwest Airlines booked revenue of $4.31 billion. The 11 analysts polled by S&P Capital IQ looked for net sales of $4.34 billion on the same basis. GAAP reported sales were 0.0% lower than the prior-year quarter's $4.31 billion.
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 $0.13. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.13 per share. GAAP EPS were $0.02 for Q3 versus -$0.18 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 21.4%, 90 basis points worse than the prior-year quarter. Operating margin was 4.5%, 160 basis points worse than the prior-year quarter. Net margin was 0.4%, 360 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $4.23 billion. On the bottom line, the average EPS estimate is $0.09.
Next year's average estimate for revenue is $17.18 billion. The average EPS estimate is $0.55.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,509 members out of 1,765 rating the stock outperform, and 256 members rating it underperform. Among 350 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 295 give Southwest Airlines a green thumbs-up, and 55 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 $11.49.
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