Southwest Airlines, Spirit Stocks Fall After Earnings

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Southwest reported record third-quarter revenue of $6.5 billion, narrowly missing estimates, while adjusted earnings of 38 cents a share are in line with...

Low-cost airline stocks have been hit by turbulence for months. Earnings from Southwest Airlines and Spirit Airlines are making things even worse.The carrier may have reported record third-quarter revenue of $6.5 billion, but that was below analysts’ estimates. Adjusted earnings per share of 38 cents were in line with analysts’ expectations.

Southwest said that leisure trends, so strong over the summer, “appear to be returning to historically seasonal norms” in the fourth quarter. Revenue per available seat mile, or unit revenue, is expected to fall between 9% and 11% in the current quarter from last year. That’s a sharper fall than the 6.8% drop in the third-quarter.

Southwest said fuel costs per gallon are set to rise, to a range of $2.90 to $3 in the fourth quarter, up from $2.78 in the third quarter.

 

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