Shares of Southwest Airlines Co. (NYSE: LUV) were up over 2% on Tuesday. The stock has dropped 21% over the past three months. The airline is scheduled to report its earnings results for the first quarter of 2025 on Thursday, April 24, before market open. Here’s a look at what to expect from the earnings report:
Revenue
Analysts are projecting revenues of $6.4 billion for Southwest in Q1 2025, which indicates a growth of 1% from the same period a year ago. In the fourth quarter of 2024, operating revenue rose nearly 2% year-over-year to $6.9 billion.
Earnings
Analysts are forecasting a loss of $0.19 per share for Q1 2025, which compares to an adjusted loss of $0.36 per share reported in Q1 2024. In Q4 2024, adjusted earnings per share rose 47% YoY to $0.56.
Points to note
The airline industry has been seeing weakness in bookings and travel demand due to a difficult macro environment. Southwest is among those experiencing this pressure. These challenges, along with a higher-than-expected completion factor, less government travel, and a greater-than-estimated impact from the California wildfires, led the company to revise its guidance for the first quarter of 2025 in an investor update last month.
Southwest now expects unit revenues for Q1 2025 to be up 2-4% YoY and capacity to be down approx. 2% YoY. The previous expectations were for unit revenues to increase 5-7% and capacity to be down 2-3% YoY.
The airline now expects CASM-X for Q1 2025 to increase approx. 6% YoY versus the prior estimate of up 7-9%, mainly due to increased capacity and lower-than-expected salary, wages and benefits, maintenance, and other expenses. CASM-X stands for operating expenses per available seat mile, excluding fuel and oil expense, special items, and profit sharing. Fuel cost per gallon is now expected to range between $2.35-2.45 versus the prior expectation of $2.50-2.60.
