Southwest Airlines Company ( LUV ) shares are trading higher on Thursday after the company reported third-quarter FY25 results on Wednesday.

Details

The company reported adjusted earnings of 11 cents per share, which exceeded the Street consensus estimate of a loss of 3 cents per share.

Quarterly revenue also came in below expectations at $6.95 billion, exceeding the $6.92 billion analyst estimate.

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Passenger revenues rose 1% year over year (Y/Y). RASM rose 0.4% Y/Y on a capacity increase of 0.8%, above the midpoint of the company’s guidance range.

The company witnessed higher demand beginning in early July, which maintained momentum throughout the third quarter.

This improving environment, coupled with successful strategic execution, drove record third-quarter revenue.

The company ended the quarter with $3.0 billion in cash and cash equivalents and short-term investments.

Southwest Airlines ( LUV ) returned $439 million to its shareholders in the quarter, including $189 million of dividends and $250 million of share repurchases.

Outlook

For the fourth quarter, Southwest Airlines ( LUV ) expects unit revenues (excluding special items) to be up 1% to 3% Y/Y based on higher capacity of approximately 6% Y/Y.

Management anticipates this will drive an all-time quarterly revenue record.

Also, it expects meaningful margin expansion in the quarter.

Regarding its fleet, the company expects to take delivery of 53 -8 aircraft in 2025 as Boeing increases production, while still planning for 55 aircraft retirements during the year.

LUV Price Action: Southwest Airlines ( LUV ) shares were down 4.65% at $32.19 at the time of publication on Thursday, according to Benzinga Pro data.

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