Southwest Airlines (NYSE:LUV) Announces Earnings Results, Meets Expectations

Key Points

• Q1 results: Southwest reported EPS of $0.45, matching estimates, but revenue of $7.25 billion missed consensus ($8.46B) despite a 12.8% year‑over‑year revenue increase and roughly $1.4 billion in operating cash flow.
• Outlook and market reaction: Management set Q2 guidance of $0.35–$0.65 EPS and warned of higher jet‑fuel costs, the stock fell about 3.6%, and analysts have a consensus "Hold" with a $44.22 price target.

Southwest Airlines (NYSE:LUV - Get Free Report) issued its quarterly earnings results on Wednesday. The airline reported $0.45 EPS for the quarter, hitting analysts' consensus estimates of $0.45, FiscalAI reports. The business had revenue of $7.25 billion for the quarter, compared to analyst estimates of $8.46 billion. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.Southwest Airlines's quarterly revenue was up 12.8% compared to the same quarter last year. During the same period last year, the company posted ($0.13) earnings per share. Southwest Airlines updated its Q2 2026 guidance to 0.350-0.650 EPS.

Southwest Airlines Trading Down 3.6%

Shares of Southwest Airlines stock opened at $39.43 on Thursday. Southwest Airlines has a 52-week low of $24.63 and a 52-week high of $55.11. The stock's 50-day simple moving average is $43.22 and its 200 day simple moving average is $40.16. The stock has a market capitalization of $19.36 billion, a P/E ratio of 46.94, a P/E/G ratio of 0.46 and a beta of 1.19. The company has a debt-to-equity ratio of 0.57, a quick ratio of 0.45 and a current ratio of 0.52.

Southwest Airlines Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Thursday, April 2nd. Investors of record on Thursday, March 12th were issued a $0.18 dividend. The ex-dividend date of this dividend was Thursday, March 12th. This represents a $0.72 annualized dividend and a yield of 1.8%. Southwest Airlines's dividend payout ratio (DPR) is 85.71%.

Wall Street Analysts Forecast Growth

A number of research firms have recently commented on LUV. Jefferies Financial Group lifted their target price on Southwest Airlines from $41.00 to $42.00 and gave the stock a "hold" rating in a research note on Tuesday, March 31st. Citigroup decreased their price objective on shares of Southwest Airlines from $54.00 to $44.00 and set a "neutral" rating for the company in a report on Friday, March 20th. UBS Group lowered their price objective on shares of Southwest Airlines from $59.00 to $56.00 and set a "buy" rating on the stock in a research report on Monday, March 23rd. Weiss Ratings reiterated a "hold (c)" rating on shares of Southwest Airlines in a research note on Friday, March 27th. Finally, Wall Street Zen downgraded shares of Southwest Airlines from a "buy" rating to a "hold" rating in a research report on Saturday, March 14th. Eight analysts have rated the stock with a Buy rating, eight have issued a Hold rating and four have assigned a Sell rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus price target of $44.22.

Hedge Funds Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently added to or reduced their stakes in LUV. Aster Capital Management DIFC Ltd bought a new position in Southwest Airlines in the 4th quarter worth approximately $196,000. EverSource Wealth Advisors LLC raised its holdings in Southwest Airlines by 73.4% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline's stock valued at $185,000 after acquiring an additional 2,408 shares during the period. Triumph Capital Management bought a new stake in Southwest Airlines during the 3rd quarter valued at $169,000. Parkside Financial Bank & Trust lifted its position in shares of Southwest Airlines by 7.5% during the fourth quarter. Parkside Financial Bank & Trust now owns 3,063 shares of the airline's stock worth $127,000 after acquiring an additional 213 shares in the last quarter. Finally, Brown Brothers Harriman & Co. lifted its position in shares of Southwest Airlines by 24.6% during the fourth quarter. Brown Brothers Harriman & Co. now owns 2,952 shares of the airline's stock worth $122,000 after acquiring an additional 582 shares in the last quarter. Institutional investors own 80.82% of the company's stock.

Southwest Airlines News Summary

Here are the key news stories impacting Southwest Airlines this week:

• Positive Sentiment: Transformation and margin progress: Southwest said its business-transformation initiatives are delivering improved margins, record first‑quarter passenger and revenue metrics, an operating margin improvement year‑over‑year and $1.4 billion in operating cash flow. SOUTHWEST AIRLINES REPORTS FIRST QUARTER RESULTS, BUSINESS TRANSFORMATION INITIATIVES DELIVER MEANINGFUL MARGIN EXPANSION
• Neutral Sentiment: Quarterly EPS context: Reported Q1 EPS of $0.45 — Zacks notes that this matched their consensus estimate, though other data vendors and some analysts show slight misses versus broader Street forecasts. Southwest Airlines (LUV) Q1 Earnings Match Estimates
• Neutral Sentiment: Business model changes continue: Management highlighted continued revenue initiatives (bag fees, assigned seating, digital programs) intended to support higher ancillary revenue and longer‑term yield improvement. Southwest Airlines forecasts quarterly earnings below estimates on higher fuel
• Negative Sentiment: Revenue and earnings shortfall vs. some Street estimates: Total Q1 revenue of $7.25B and EPS of $0.45 came in below several analyst consensus figures, prompting downward pressure on the stock. Southwest Airlines Company (LUV) stock falls on Q1 2026 Earnings
• Negative Sentiment: Weaker Q2 guidance and fuel headwind: Management set Q2 EPS guidance of $0.35–$0.65, below consensus and flagging sharply higher jet‑fuel costs (linked to the conflict in Iran) that will compress margins in the near term. Southwest Airlines forecasts second-quarter profit below estimates as fuel costs soar
• Negative Sentiment: Analyst/market reaction and insider activity: Some firms kept cautious ratings or reduced targets (BNP Paribas Exane adjusted its PT while maintaining an underperform view) and Quiver notes recent insider sales — both add to near‑term selling pressure. BNP Paribas adjusts PT on Southwest Airlines to $33 from $24; maintains underperform rating

About Southwest Airlines

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest's operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.