The 10-second takeaway
For the quarter ended March 31 (Q1), Southwest Airlines met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased slightly. Non-GAAP earnings per share grew. GAAP earnings per share dropped significantly.
Gross margins increased, operating margins grew, net margins dropped.
Southwest Airlines reported revenue of $4.08 billion. The 11 analysts polled by S&P Capital IQ predicted net sales of $4.07 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 $0.07. The 15 earnings estimates compiled by S&P Capital IQ averaged $0.03 per share. Non-GAAP EPS were $0.07 for Q1 versus -$0.02 per share for the prior-year quarter. GAAP EPS of $0.08 for Q1 were 38% lower than the prior-year quarter's $0.13 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 19.4%, 120 basis points better than the prior-year quarter. Operating margin was 2.0%, 110 basis points better than the prior-year quarter. Net margin was 1.4%, 110 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.73 billion. On the bottom line, the average EPS estimate is $0.39.
Next year's average estimate for revenue is $17.75 billion. The average EPS estimate is $0.99.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,527 members out of 1,783 rating the stock outperform, and 256 members rating it underperform. Among 377 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 331 give Southwest Airlines a green thumbs-up, and 46 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 $13.87.
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