Southwest Airlines (NYSE:LUV) Announces Quarterly Earnings Results, Beats Estimates By $0.10 EPS

Key Points

• Southwest Airlines reported a quarterly earnings per share (EPS) of $0.11, surpassing the consensus estimate of ($0.02) by $0.13.
• The airline announced a quarterly dividend of $0.18 per share, yielding 2.1%, with a current payout ratio of 109.09%.
• Shares of Southwest Airlines (NYSE:LUV) traded down 2.7% following the earnings release, with current trading at $33.74.

Southwest Airlines (NYSE:LUV - Get Free Report) posted its earnings results on Wednesday. The airline reported $0.11 EPS for the quarter, beating the consensus estimate of $0.01 by $0.10, Zacks reports. The firm had revenue of $6.95 billion for the quarter, compared to analyst estimates of $6.93 billion. Southwest Airlines had a return on equity of 6.27% and a net margin of 1.43%.Southwest Airlines's revenue for the quarter was up 1.1% compared to the same quarter last year. During the same quarter in the prior year, the company posted $0.15 earnings per share.

Southwest Airlines Stock Performance

Shares of LUV stock opened at $33.74 on Thursday. The stock's 50-day moving average is $32.34 and its two-hundred day moving average is $31.56. The firm has a market cap of $17.72 billion, a price-to-earnings ratio of 51.12, a PEG ratio of 0.90 and a beta of 1.21. Southwest Airlines has a 1 year low of $23.82 and a 1 year high of $37.96. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56.

Southwest Airlines Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd were issued a dividend of $0.18 per share. The ex-dividend date of this dividend was Wednesday, September 3rd. This represents a $0.72 annualized dividend and a dividend yield of 2.1%. Southwest Airlines's dividend payout ratio (DPR) is presently 109.09%.

Analyst Upgrades and Downgrades

Several equities analysts recently commented on the company. Wall Street Zen lowered Southwest Airlines from a "hold" rating to a "sell" rating in a report on Saturday, July 26th. Evercore ISI increased their target price on Southwest Airlines from $34.00 to $35.00 and gave the company an "in-line" rating in a report on Monday, September 29th. Weiss Ratings reissued a "hold (c)" rating on shares of Southwest Airlines in a report on Wednesday, October 8th. TD Cowen increased their target price on Southwest Airlines from $21.00 to $24.00 and gave the company a "hold" rating in a report on Friday, October 3rd. Finally, Jefferies Financial Group increased their target price on Southwest Airlines from $30.00 to $31.00 and gave the company a "hold" rating in a report on Wednesday, October 1st. Five equities research analysts have rated the stock with a Buy rating, ten have issued a Hold rating and four have issued a Sell rating to the company's stock. According to data from MarketBeat.com, Southwest Airlines presently has a consensus rating of "Hold" and an average target price of $33.38.

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

Insider Activity

In other news, Director Gregg A. Saretsky acquired 3,345 shares of the company's stock in a transaction on Wednesday, August 6th. The shares were bought at an average price of $30.03 per share, with a total value of $100,450.35. Following the completion of the acquisition, the director owned 23,644 shares in the company, valued at $710,029.32. This trade represents a 16.48% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link. Also, Director Sarah Feinberg acquired 1,500 shares of the company's stock in a transaction on Tuesday, August 5th. The shares were purchased at an average cost of $30.01 per share, for a total transaction of $45,015.00. Following the acquisition, the director owned 14,229 shares of the company's stock, valued at approximately $427,012.29. The trade was a 11.78% increase in their position. The disclosure for this purchase can be found here. Company insiders own 0.79% of the company's stock.

Institutional Investors Weigh In On Southwest Airlines

Several hedge funds have recently made changes to their positions in LUV. AQR Capital Management LLC boosted its stake in shares of 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 during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in shares of Southwest Airlines by 5.4% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 61,060 shares of the airline's stock worth $2,050,000 after buying an additional 3,141 shares during the period. Empowered Funds LLC boosted its stake in shares of Southwest Airlines by 7.6% during the first quarter. Empowered Funds LLC now owns 7,459 shares of the airline's stock worth $250,000 after buying an additional 527 shares during the period. EverSource Wealth Advisors LLC boosted its stake in shares of Southwest Airlines by 73.4% during the second quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline's stock worth $185,000 after buying an additional 2,408 shares during the period. Finally, First Trust Advisors LP boosted its stake in shares of Southwest Airlines by 47.4% during the second quarter. First Trust Advisors LP now owns 307,602 shares of the airline's stock worth $9,979,000 after buying an additional 98,986 shares during the period. Institutional investors and hedge funds own 80.82% of the company's stock.

About Southwest Airlines

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.