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. It also provides inflight entertainment and connectivity services on Wi-Fi enabled aircraft; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares. In addition, the company offers a suite of digital platforms to support customers' travel needs, including websites and apps; and SWABIZ, an online booking tool. Further, it provides ancillary services, such as Southwest's EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. Southwest Airlines Co. was incorporated in 1967 and is headquartered in Dallas, Texas.

Southwest Airlines Company

It has been about a month since the last earnings report for Southwest Airlines (LUV). Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Southwest due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Southwest Airlines Lags on Q2 Earnings
Southwest Airlines reported disappointing second-quarter 2025 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings of 43 cents missed the Zacks Consensus Estimate of 51 cents and declined 25.9% year over year. Revenues of $7.24 billion missed the Zacks Consensus Estimate of $7.29 billion as well as declined 1.5% year over year. Passenger revenues (which accounted for 91.5% of the top line) decreased 1.3% year over year to $6.62 billion.
Domestic leisure travel stabilized during second quarter 2025, with recent trends showing signs of improvement.
Operating Statistics
Airline traffic, measured in revenue passenger miles, fell 3.5% year over year to 36.88 billion in the quarter under review. Capacity or available seat miles (ASMs) grew 1.6% year over year to 46.99 billion.As traffic failed to outpace capacity expansion, load factor (percentage of seat occupancy) fell 4.1 percentage points to 78.5%.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) fell 2.8% year over year to 14.10 cents.
Revenue per available seat mile (RASM) fell 3.1% to 15.41 cents.
Operating Expenses & Income
In the second quarter, Southwest incurred an operating income of $225 million, compared with an operating income of $398 million in the year-ago reported quarter. On an adjusted basis (excluding special items), the company reported operating income of $245 million, compared with $405 million of operating income in the year-ago reported quarter.
Total adjusted operating expenses (excluding profit sharing, special items, fuel and oil expenses) increased 6.4%.
Fuel cost per gallon (inclusive of fuel tax: economic) fell 15.9% to $2.32.
Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, oil and profit-sharing expenses, and special items grew 4.7% year over year.
Liquidity
Southwest Airlines ended the second quarter with cash and cash equivalents of $3.47 billion compared with $8.13 billion at the end of prior quarter. As of Jun 30, 2025, the company had long-term debt (less current maturities) of $4.08 billion, which was flat sequentially
LUV generated $401 million of cash from operating activities in the reported quarter. Second quarter 2025 capital expenditures were $635 million, owing to aircraft-related capital spending, coupled with technology, facilities, and operational investments.
During second-quarter 2025, LUV returned $1.6 billion to shareholders which includes $103 million of dividend payments and $1.5 billion of share repurchases.
By repurchasing the remaining $1.5 billion through an accelerated share repurchase (ASR) program, LUV has completed the September 2024 $2.5 billion share repurchase authorization in second quarter 2025. Final settlement of shares purchased through the second quarter 2025 ASR program is anticipated to occur by the end of July 2025.
LUV’s board of directors recently approved a $2.0 billion share repurchase authorization expected to be completed over a period of up to two years.
Outlook
LUV anticipates its third-quarter 2025 unit revenues to be in the range of down 2% to up 2% on roughly flat capacity, both on a year-over-year basis. This guidance range assumes a modest sequential improvement in demand. Company-specific initiatives provide a unique offset to the broader industry revenue impact, and will continue to accelerate throughout third quarter 2025.
Economic fuel costs per gallonare expected to be $2.40 to $2.50. Interest expenses are expected to be $35 million in the third quarter.
LUV continues to expect to achieve its $370 million cost reduction target this year. LUV anticipates third quarter 2025 CASM-X to increase in the range of 3.5 - 5.5%, on a year-over-year basis. This increase is due to the continuation of inflationary pressures, including those associated with labor contracts ratified in 2024, as well as approximately one point from the timing of engine overhaul expenses and one-half point from aircraft retrofit costs in advance of extra legroom seating launching in January 2026. Excluding the impact of book gains from fleet transactions in the fourth quarter of both years, LUV continues to expect fourth quarter 2025 CASM-X to be up low-single digits, year-over-year. LUV remains focused on driving efficiencies to offset overall inflationary cost pressures and achieve its multi-year cost reduction targets.
LUV continues to anticipate its 2025 capital spending to be in the range of $2.5 billion to $3.0 billion (including the additional aircraft deliveries now expected, as well as the impact of the expected sale of five -800 aircraft this year).
LUV’s full year 2025 EBIT guidance assumes further sequential improvement from third quarter 2025, driven by accelerating incremental revenue from company-specific initiatives, the recovery of the temporary basic economy optimization impact, and anticipated improvement in domestic leisure travel trends.
LUV is reaffirming its full year incremental EBIT contribution targets of $1.8 billion for 2025 and $4.3 billion for 2026 from those initiatives.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -106.21% due to these changes.
VGM Scores
Currently, Southwest has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Southwest has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Southwest belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Ryanair (RYAAY), has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Ryanair reported revenues of $4.92 billion in the last reported quarter, representing a year-over-year change of +26.1%. EPS of $1.74 for the same period compares with $0.68 a year ago.
For the current quarter, Ryanair is expected to post earnings of $3.53 per share, indicating a change of +25.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Ryanair. Also, the stock has a VGM Score of A.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Is Southwest (LUV) Down 6.6% Since Last Earnings Report?

In trading on Friday, shares of Southwest Airlines Co (Symbol: LUV) crossed above their 200 day moving average of $31.66, changing hands as high as $32.09 per share. Southwest Airlines Co shares are currently trading up about 2.7% on the day. The chart below shows the one year performance of LUV shares, versus its 200 day moving average:
Looking at the chart above, LUV's low point in its 52 week range is $23.815 per share, with $37.96 as the 52 week high point — that compares with a last trade of $32.12. The LUV DMA information above was sourced from TechnicalAnalysisChannel.com
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Southwest Airlines Breaks Above 200-Day Moving Average - Bullish for LUV

(RTTNews) - Southwest Airlines Co. (LUV) announced service at Knoxville, Tennessee's McGhee Tyson Airport scheduled to begin March 5, 2026. The five daily round-trips to and from Knoxville, along with the airline's schedule through April 6, 2026, are now available for purchase. Southwest Airlines is scheduled to introduce twice-daily service between Knoxville and Nashville, as well as daily roundtrip flights between Knoxville and Baltimore, Dallas, and Orlando, Florida.
Southwest said it is also growing Spring Break ski destinations with Saturday service slated for March 7, 2026, connecting San Diego with Bozeman, Montana, and Spokane, Washington.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Southwest Airlines Adds Knoxville As New Destination

Key Points
The company has a new chair of its board of directors.
The activist investor agitating for change praised the outgoing leader.
Southwest Airlines (NYSE: LUV) announced a sudden change in its corporate governance, and that shift rattled some investors. The airline's stock price took an almost 4% hit on Friday during a session when the S&P 500 index closed down a relatively modest 1.6%.
New day, new chair
Just after market close on Thursday, Southwest announced that Rakesh Gangwal had resigned from his position as chair of the company's board of directors. The move was effective on Friday. Board member Doug Brooks was tapped to replace him. Gangwal will continue to serve as a director at the airline.
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Southwest said that Gangwal cited "increased time commitments unrelated to the airline" as the reason for his move.
Additionally, the company announced it had formed a fleet oversight committee, which is to be headed by Gangwal. This body will be responsible for monitoring Southwest's aircraft-acquisition activities. In addition to this duty, Gangwal is continuing to serve on the finance, and nominating and corporate governance committees.
Clipped wings
Battered by assertive moves into the discount flight space made by rivals, Southwest has had its struggles in recent years, and the stock is not as popular as it once was. Activist investment firm Elliott Management bought a stake in the airline in mid-2024 and has been agitating for changes in the board and managerial composition, plus corporate strategy, since then.
It's unclear whether this pressure was a factor in Gangwal's resignation.
Elliott issued a press release on the matter after it was disclosed, thanking the outgoing chair for his service. The activist said it was still "confident in Southwest's trajectory and we look forward to continuing our constructive engagement as the company executes its plan to drive long-term value."
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Southwest Airlines Stock Dived by Nearly 4% on Friday

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Friday, shares of Southwest Airlines Co (Symbol: LUV) entered into oversold territory, hitting an RSI reading of 29.5, after changing hands as low as $29.34 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 49.2. A bullish investor could look at LUV's 29.5 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of LUV shares:
Looking at the chart above, LUV's low point in its 52 week range is $23.58 per share, with $37.96 as the 52 week high point — that compares with a last trade of $29.52.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

RSI Alert: Southwest Airlines (LUV) Now Oversold

(RTTNews) - Southwest Airlines Co. (LUV) announced that Rakesh Gangwal will step down as Chair of the Board effective August 1, 2025, citing increased time commitments unrelated to the airline. Doug Brooks has been appointed as the new independent Chair, also effective August 1, 2025.
The company also announced the formation of a new Fleet Oversight Committee to assist the Board in its oversight of the Company's aircraft fleet acquisition strategy. Gangwal will serve as Chair of the newly formed Fleet Oversight Committee and continue to serve on the Finance Committee and the Nominating & Corporate Governance Committee.
In a separate press release, Elliott expressed appreciation for Rakesh Gangwal's leadership and contributions as independent Chair of Southwest Airlines during a pivotal phase in the company's evolution. Elliott acknowledged his ongoing role as a Board member and affirmed confidence in Southwest's strategic direction. Elliott emphasized a commitment to continued constructive engagement as the airline advances its long-term value creation plan.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Southwest Airlines Names Doug Brooks New Board Chair As Rakesh Gangwal Resigns

(RTTNews) - Southwest Airlines Co. (LUV), Tuesday announced that assigned and premium seating are available for purchase at the company's website, starting January 27, 2026.
Under this new arrangement, customers can choose their preferred fare bundle, including the opportunity to purchase assigned and premium seating and select a seat at booking.
Additionally, the company announced that its previously announced service to St. Thomas, United States Virgin Islands is now on sale, with first daily roundtrip flight between St. Thomas and Orlando scheduled for February 5, 2026.
In the pre-market hours, LUV is trading at $32.60, up 0.25 percent on the New York Stock Exchange.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Southwest Airlines To Avail Assigned, Premium Seating For Purchase Next Year

The S&P 500 Index ($SPX) (SPY) Thursday closed up +0.07%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.70%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.25%. September E-mini S&P futures (ESU25) rose +0.09%, and September E-mini Nasdaq futures (NQU25) rose +0.33%.
Stock indexes on Thursday settled mostly higher, with the S&P 500 and Nasdaq 100 posting new all-time highs. Earnings results from Alphabet showed solid demand for artificial intelligence and bolstered confidence in technology stocks, which rose after the company reported better-than-expected Q2 revenue. Stocks added to their gains on signs of resilience in the US labor market, following the unexpected decline in weekly initial unemployment claims to a 3-month low.
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On the negative side, Tesla closed down more than -7% after reporting its biggest revenue decline in at least ten years and CEO Musk warning of a "rough patch" for the company for the next year or more. Also, IBM fell more than -7% to weigh on the Dow Jones Industrials after reporting weaker-than-expected Q2 software revenue. In addition, signs of weakness in US manufacturing activity are bearish for stocks after the July S&P US manufacturing PMI fell -3.4 to 49.5, weaker than expectations of 52.7 and the weakest level in 7 months.
US weekly initial unemployment claims unexpectedly fell -4,000 to a 3-month low of 217,000, showing a stronger labor market than expectations of an increase to 226,000.
The US June Chicago Fed national activity index rose +0.06 to -0.10, stronger than expectations of -0.15.
US June new home sales rose +0.6% m/m to 627,000, weaker than expectations of +4.3% m/m to 650,000.
The markets are awaiting President Trump's August 1 deadline for trade deals to avoid high tariffs. Last Wednesday, Mr. Trump announced that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1. As an update, Mr. Trump late Wednesday said, "We'll have a straight, simple tariff of anywhere between 15% and 50%," an indication that the floor for tariffs is rising and suggesting that he would not go below 15%.
The markets this week will focus on any tariff news, along with the announcement of any new trade deals. On Friday, June capital goods new orders nondefense ex-aircraft and parts are expected to increase by +0.2% m/m.
Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 63% at the following meeting on September 16-17.
The markets this week absorbed a heavy slate of quarterly corporate earnings, with reports from about one-fifth of the companies in the S&P 500. Early results now show S&P 500 earnings are on track to rise +3.2% for the second quarter, better than the pre-season expectations of +2.8% y/y, according to Bloomberg Intelligence. Also, only six of the eleven S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research.
Overseas stock markets on Thursday settled higher. The Euro Stoxx 50 closed up +0.20%. China's Shanghai Composite closed up +0.65%. Japan's Nikkei Stock 225 climbed to a new 1-year high and closed up sharply for a second session by +1.59%.
Interest Rates
September 10-year T-notes (ZNU25) Thursday closed down -6 ticks. The 10-year T-note yield rose by +3.2 bp to 4.412%. T-notes were under pressure on Thursday due to reduced safe-haven demand for government securities, as optimism grew that the US would reach more trade deals with its trading partners following the clinching of a deal with Japan on Wednesday. Also, Bloomberg News reported on Wednesday that the US and EU are closing in on a trade deal. T-notes dropped to their lows Thursday after weekly US jobless claims unexpectedly fell to a 3-month low, a sign of labor market strength that is hawkish for Fed policy.
However, T-notes recovered from their worst levels Thursday after June new home sales rose less than expected and the US manufacturing PMI unexpectedly fell to a 7-month low, dovish factors for Fed policy.
European government bond yields on Thursday finished mixed. The 10-year German bund yield rose to a 1-week high of 2.711% and ended up +6.3 bp to 2.702%. The 10-year UK gilt yield fell -1.3 bp to 4.622%.
The Eurozone July S&P manufacturing PMI rose +0.3 to a 3-year high of 49.8, right on expectations. The Eurozone July S&P composite PMI rose +0.4 to 51.0, stronger than expectations of +0.1 to 50.7 and the strongest level in 11 months.
Eurozone Jun new car registrations fell -7.3% y/y to 1.010 million units, the largest decline in 10 months.
The German Aug GfK consumer confidence index unexpectedly fell -1.2 to a 4-month low of -21.5, weaker than expectations of an increase to -19.3.
As expected, the ECB kept the deposit facility rate unchanged at 2.00%. The ECB said, "Inflation is currently at the 2% medium-term target," and the economy has so far proven resilient, but the environment remains uncertain due to trade disputes.
ECB President Lagarde said the economic risks to the Eurozone are tilted to the downside, and a stronger euro could dampen inflation more than expected.
Swaps are discounting the chances at 21% for a -25 bp rate cut by the ECB at the September 11 policy meeting.
US Stock Movers
The Magnificent Seven stocks, sans Apple and Tesla, rallied Thursday and supported gains in the broader market. Nvidia (NVDA), Amazon.com (AMZN), and Microsoft (MSFT) closed up more than +1%. Also, Alphabet (GOOGL) closed up +0.88%, and Meta Platforms (META) closed up +0.17%.
West Pharmaceutical Services (WST) closed up more than +22% to lead gainers in the S&P 500 after reporting Q2 net sales of $766.5 million, well above the consensus of $726.1 million, and raising its full-year net sales forecast to $3.04 billion-$3.06 billion from a previous forecast of $2.95 billion-$2.98 billion, stronger than the consensus of $2.96 billion.
United Rentals (URI) closed up more than +8% after reporting Q2 revenue of $3.94 billion, above the consensus of $3.90 billion, and said it was adding $400 million to its stock buyback program.
Labcorp Holdings (LH) closed up more than +6% after reporting Q2 revenue of $3.53 billion, better than the consensus of $3.49 billion, and raising its full-year adjusted EPS estimate to $16.05-$16.50 from a previous estimate of $15.70-$16.40.
T-Mobile US (TMUS) closed up more than +5% to lead gainers in the Nasdaq 100 after reporting Q2 total postpaid net customers of 1.77 million, above the consensus of 1.34 million, and raising its full-year postpaid net customers forecast to 6.1 million-6.4 million from a previous estimate of 5.5 million-6.0 million, better than the consensus of 5.94 million.
ServiceNow (NOW) closed up more than +4% after reporting Q2 subscription revenue of $3.11 billion, above the consensus of $3.04 billion, and raising its full-year subscription revenue forecast to $12.78 billion-$12.80 billion from a previous forecast of $12.64 billion-$12.68 billion, stronger than the consensus of $12.68 billion.
Las Vegas Sands (LVS) closed up more than +4% after reporting Q2 net revenue of $3.18 billion, well above the consensus of $2.83 billion.
A O Smith (AOS) closed up more than +3% after boosting its full-year net sales forecast to $3.85 billion-$3.93 billion from a previous forecast of $3.80 billion-$3.90 billion, better than the consensus of $3.86 billion.
LKQ Corp (LKQ) closed down more than -17% to lead losers in the S&P 500 after reporting Q2 adjusted EPS continuing operations of 87 cents, weaker than the consensus of 93 cents.
Dow Inc. (DOW) closed down more than -17% after reporting a Q2 adjusted operating loss per share of -42 cents, a much wider loss than the consensus of -18 cents.
Molina Healthcare (MOH) closed down more than -16% after reporting Q2 adjusted EPS of $5.48, below the consensus of $5.52, and cutting its full-year adjusted EPS forecast to at least $19.00 from a previous estimate of $21.50-$22.50, weaker than the consensus of $22.08.
Chipotle Mexican Grill (CMG) closed down more than -13% after reporting Q2 comparable sales fell -4%, weaker than the consensus of -2.91%, and cutting its full-year comparable sales forecast to 0% from a previous forecast of low single-digits growth.
Tesla (TSLA) closed down more than -7% to lead losers in the Nasdaq 100 after reporting Q2 revenue of $22.50 billion, below the consensus of $22.64 billion, and CEO Musk warning of a "rough patch" for the company for the next year or more.
International Business Machines (IBM) closed down more than -7% to lead losers in the Dow Jones Industrials after reporting Q2 software revenue of $7.39 billion, weaker than the consensus of $7.49 billion.
Southwest Airlines (LUV) closed down more than -11% after cutting its full-year EBIT to $600 million-$800 million from a previous estimate of $1.7 billion, saying it expects fallout from tariff turmoil to erase as much as $1 billion of its annual pre-tax profit this year.
American Airlines Group (AAL) closed down more than -9% after reinstating annual earnings guidance for 2025 from an adjusted loss of -20 cents a share to a profit of 80 cents, with the midpoint well below the consensus of a 72-cent profit.
Earnings Reports (7/25/2025)
Aon PLC (AON), AutoNation Inc (AN), Booz Allen Hamilton Holding Co (BAH), Centene Corp (CNC), Charter Communications Inc (CHTR), Erie Indemnity Co (ERIE), First Citizens BancShares Inc/ (FCNCA), First Hawaiian Inc (FHB), Gentex Corp (GNTX), HCA Healthcare Inc (HCA), Lear Corp (LEA), OneMain Holdings Inc (OMF), Phillips 66 (PSX), Saia Inc (SAIA), Skechers USA Inc (SKX).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

S&P 500 and Nasdaq 100 Post Record Highs on Tech Stock Strength

Looking at the universe of stocks we cover at Dividend Channel, in trading on Thursday, shares of Southwest Airlines Co (Symbol: LUV) were yielding above the 2% mark based on its quarterly dividend (annualized to $0.72), with the stock changing hands as low as $35.09 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return. To illustrate, suppose for example you purchased shares of the S&P 500 ETF (SPY) back on 12/31/1999 — you would have paid $146.88 per share. Fast forward to 12/31/2012 and each share was worth $142.41 on that date, a decrease of $4.67/share over all those years. But now consider that you collected a whopping $25.98 per share in dividends over the same period, for a positive total return of 23.36%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.6%; so by comparison collecting a yield above 2% would appear considerably attractive if that yield is sustainable. Southwest Airlines Co (Symbol: LUV) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index.
In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Southwest Airlines Co, looking at the history chart for LUV below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 2% annual yield.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Southwest Airlines (LUV) Shares Cross 2% Yield Mark

Southwest Airlines Co. (LUV) reported disappointing second-quarter 2025 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings of 43 cents per share missed the Zacks Consensus Estimate of 51 cents and declined 25.9% year over year. Revenues of $7.24 billion missed the Zacks Consensus Estimate of $7.29 billion and declined 1.5% year over year. Passenger revenues (which accounted for 91.5% of the top line) decreased 1.3% year over year to $6.62 billion.
Domestic leisure travel stabilized during second-quarter 2025, with recent trends showing signs of improvement.
Southwest Airlines Co. Price, Consensus and EPS Surprise
Operating Statistics
Airline traffic, measured in revenue passenger miles, fell 3.5% year over year to 36.88 billion in the quarter under review. Capacity or available seat miles (ASMs) grew 1.6% year over year to 46.99 billion.As traffic failed to outpace capacity expansion, load factor (percentage of seat occupancy) fell 4.1 percentage points to 78.5%. Our estimate stands at 79.2%.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) fell 2.8% year over year to 14.10 cents.
Revenue per available seat mile (RASM) fell 3.1% year over year to 15.41 cents.
Operating Expenses & Income
In the second quarter, Southwest Airlines incurred an operating income of $225 million compared with $398 million in the year-ago reported quarter. On an adjusted basis (excluding special items), the company reported operating income of $245 million compared with $405 million in the year-ago quarter.
Total adjusted operating expenses (excluding profit sharing, special items, fuel and oil expenses) increased 6.4% year over year.
Fuel cost per gallon (inclusive of fuel tax: economic) fell 15.9% year over year to $2.32.
Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, oil and profit-sharing expenses, and special items grew 4.7% year over year.
Liquidity
Southwest Airlines ended the second quarter with cash and cash equivalents of $3.47 billion compared with $8.13 billion at the end of the prior quarter. As of June 30, 2025, the company had long-term debt (less current maturities) of $4.08 billion, which was flat sequentially.
LUV generated $401 million of cash from operating activities in the reported quarter. Second-quarter 2025 capital expenditures were $635 million, owing to aircraft-related capital spending, coupled with technology, facilities, and operational investments.
During the second quarter of 2025, LUV returned $1.6 billion to shareholders, which includes $103 million of dividend payments and $1.5 billion of share repurchases.
By repurchasing the remaining $1.5 billion through an accelerated share repurchase (ASR) program, LUV has completed the September 2024 $2.5 billion share repurchase authorization in the second quarter of 2025. Final settlement of shares purchased through the second quarter of 2025 ASR program is anticipated to occur by the end of July 2025.
LUV’s board of directors recently approved a $2.0 billion share repurchase authorization expected to be completed over a period of up to two years.
LUV anticipates its third-quarter 2025 unit revenues to be in the range of down 2% to up 2% on roughly flat capacity, both on a year-over-year basis. This guidance range assumes a modest sequential improvement in demand. Company-specific initiatives provide a unique offset to the broader industry revenue impact, and will continue to accelerate throughout the third quarter of 2025.
Economic fuel costs per gallonare expected to be in the range of $2.40 to $2.50. Interest expenses are expected to be $35 million in the third quarter.
LUV continues to expect to achieve its $370 million cost reduction target this year. LUV anticipates third-quarter 2025 CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase in the range of 3.5-5.5%, on a year-over-year basis. This increase is due to the continuation of inflationary pressures, including those associated with labor contracts ratified in 2024, as well as approximately one point from the timing of engine overhaul expenses and one-half point from aircraft retrofit costs in advance of extra legroom seating launching in January 2026. Excluding the impact of book gains from fleet transactions in the fourth quarter of both years, LUV continues to expect fourth-quarter 2025 CASM-X to be up low single digits year over year. LUV remains focused on driving efficiencies to offset overall inflationary cost pressures and achieve its multi-year cost reduction targets.
LUV continues to anticipate its 2025 capital spending to be in the range of $2.5 billion-$3.0 billion (including the additional aircraft deliveries now expected, as well as the impact of the expected sale of five-800 aircraft this year).
LUV’s 2025 EBIT guidance assumes further sequential improvement from third-quarter 2025, driven by accelerating incremental revenue from company-specific initiatives, the recovery of the temporary basic economy optimization impact, and anticipated improvement in domestic leisure travel trends.
LUV is reaffirming its full-year incremental EBIT contribution targets of $1.8 billion for 2025 and $4.3 billion for 2026 from those initiatives.
Currently, LUV carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 Performances of Other Transportation Companies
Delta Air Lines (DAL) reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.
Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion.
J.B. Hunt Transport Services, Inc. (JBHT) reported second-quarter 2025 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.34 and declined 0.8% year over year.
Total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $2.94 billion and were flat year over year. JBHT’s second-quarter revenue performance witnessed a 6% increase in Intermodal (JBI) loads, a 13% increase in Truckload (JBT) loads, a 3% increase in Dedicated Contract Services (DCS) productivity and a 6% increase in Integrated Capacity Solutions (ICS) revenue per load. These items were offset by Final Mile Services revenue declining 10%, lower revenue per load in both JBI and JBT, a 9% decrease in ICS load volume and a 3% decline in average trucks in DCS. Total operating revenues, excluding fuel surcharge revenue, increased 1% on a year-over-year basis.
United Airlines Holdings, Inc. (UAL) reported mixed second-quarter 2025 results wherein the company’s earnings beat the Zacks Consensus Estimate, but revenues missed the same.
UAL's second-quarter 2025 adjusted earnings per share (excluding 90 cents from non-recurring items) of $3.87 surpassed the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25.
Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) increased 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year.
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