Southwest Airlines handily beat earnings expectations and posted record quarterly revenue, but the stock lost ground Thursday after the air carrier’s mixed guidance.
For the second quarter, Southwest (ticker: LUV) reported adjusted earnings of $1.30 a share on a record $6.7 billion in sales. Analysts surveyed by FactSet were expecting earnings per share of $1.17 and $6.69 billion in revenue.
The stock was down 4.34% in premarket trading on Thursday as investors reacted to mixed third-quarter guidance.
The regional carrier said it was expecting revenue to rise between 8% and 12% in the third quarter, compared to the same quarter 2019, while available seat miles will be flat compared to 2019 levels. Costs also will increase in the third quarter, with cost per available seat mile, or CASM, projected to rise between 12% and 15%.
Costs will remain elevated throughout fiscal 2022, Southwest said, and maintained its previous guidance for CASM to be up between 12% and 16%, while available seat miles should be down 4% from same period in 2019.
“We experienced inflationary pressures and headwinds from operating at suboptimal productivity levels in second quarter, which we expect will continue in second half 2022,” said CEO Bob Jordan in a press release.
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