Southwest Airlines (NYSE:LUV) Announces Quarterly Earnings Results

Southwest Airlines (NYSE:LUV - Get Free Report) announced its earnings results on Wednesday. The airline reported $0.43 EPS for the quarter, missing analysts' consensus estimates of $0.51 by ($0.08), Zacks reports. Southwest Airlines had a net margin of 1.43% and a return on equity of 5.95%. The firm had revenue of $7.24 billion for the quarter, compared to analyst estimates of $7.30 billion. During the same period in the previous year, the company earned $0.58 EPS. Southwest Airlines's revenue was down 2.1% compared to the same quarter last year.

Southwest Airlines Stock Performance

Shares of LUV stock traded down $0.06 during trading hours on Friday, reaching $33.21. 16,998,292 shares of the company's stock were exchanged, compared to its average volume of 12,062,287. The company has a market cap of $18.92 billion, a P/E ratio of 50.31, a price-to-earnings-growth ratio of 5.68 and a beta of 1.21. The company has a debt-to-equity ratio of 0.44, a current ratio of 0.77 and a quick ratio of 0.72. The company's 50 day moving average is $33.51 and its two-hundred day moving average is $31.34. Southwest Airlines has a 1 year low of $23.58 and a 1 year high of $37.96.

Southwest Airlines Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, July 9th. Shareholders of record on Wednesday, June 18th were issued a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a yield of 2.17%. The ex-dividend date was Wednesday, June 18th. Southwest Airlines's dividend payout ratio is presently 84.71%.

Wall Street Analysts Forecast Growth

Several research analysts recently weighed in on LUV shares. Susquehanna lowered their price objective on Southwest Airlines from $34.00 to $25.00 and set a "neutral" rating for the company in a research report on Monday, April 7th. Raymond James Financial reiterated an "outperform" rating and issued a $40.00 price objective (down from $42.00) on shares of Southwest Airlines in a research note on Tuesday, April 29th. Barclays increased their price objective on Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a research note on Thursday, July 10th. Deutsche Bank Aktiengesellschaft upgraded Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price target on the stock in a research note on Thursday, May 29th. Finally, Evercore ISI cut their price target on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating on the stock in a research note on Friday. Six analysts have rated the stock with a sell rating, ten have issued a hold rating and four have given a buy rating to the company. According to data from MarketBeat, the stock presently has a consensus rating of "Hold" and an average price target of $32.75.

Southwest Airlines declared that its Board of Directors has initiated a share repurchase program on Wednesday, July 23rd that allows the company to buyback $2.00 billion in shares. This buyback authorization allows the airline to repurchase up to 9.4% of its shares through open market purchases. Shares buyback programs are often an indication that the company's management believes its stock is undervalued.

Insider Buying and Selling at Southwest Airlines

In related news, Director David P. Hess bought 7,500 shares of Southwest Airlines stock in a transaction that occurred on Monday, April 28th. The shares were purchased at an average price of $26.52 per share, with a total value of $198,900.00. Following the purchase, the director owned 23,156 shares in the company, valued at $614,097.12. This represents a 47.90% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, Director Gregg A. Saretsky purchased 3,670 shares of the company's stock in a transaction on Wednesday, April 30th. The shares were bought at an average cost of $27.29 per share, with a total value of $100,154.30. Following the transaction, the director directly owned 14,881 shares of the company's stock, valued at $406,102.49. This represents a 32.74% increase in their position. The disclosure for this purchase can be found here. Insiders own 0.79% of the company's stock.

Hedge Funds Weigh In On Southwest Airlines

Several hedge funds have recently bought and sold shares of LUV. AQR Capital Management LLC increased its position in Southwest Airlines by 100.6% during the first quarter. AQR Capital Management LLC now owns 39,347 shares of the airline's stock worth $1,303,000 after buying an additional 19,729 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in Southwest Airlines by 5.4% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 61,060 shares of the airline's stock worth $2,050,000 after acquiring an additional 3,141 shares during the period. Finally, Empowered Funds LLC grew its stake in Southwest Airlines by 7.6% in the 1st quarter. Empowered Funds LLC now owns 7,459 shares of the airline's stock worth $250,000 after acquiring an additional 527 shares during the period. Hedge funds and other institutional investors own 80.82% of the company's stock.

Southwest Airlines Company Profile

Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.