Fri, Apr 25, 10:03 AM (18 days ago)
**Southwest Airlines Co. (LUV) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $6.4 billion, up 1.6% YoY, driven by record passenger and other revenues. - **Profit Margins:** Operating loss of $223 million, net loss of $149 million, both improved YoY. - **Cash Flow:** Positive operating cash flow of $860 million, driven by net results and seasonal bookings. **Key Metrics:** - **Passenger Revenue:** $5.8 billion, up 1.7% YoY. - **Load Factor:** 73.9%, down 4.4 points YoY. - **Fuel Costs:** $1.2 billion, down 18.4% YoY due to lower prices and consumption. - **Operating Expenses:** $6.6 billion, down 1.1% YoY, with higher salaries offset by lower fuel costs. **Earnings Changes:** - **EPS:** Basic and diluted net loss per share of $0.26, improved from $0.39 YoY. **Quarterly Performance:** - **Revenue Growth:** Driven by network and revenue management initiatives. - **Cost Management:** Implemented cost savings initiatives, including corporate overhead reductions. **Trends & Uncertainties:** - **Capacity:** Plans to reduce capacity in H2 2025 due to lower demand. - **Fuel Hedges:** Discontinued fuel hedging program due to high premium costs. - **Legal Proceedings:** Ongoing litigation and investigations, with no material adverse impact expected. **Future Operations:** - **2025 Outlook:** Expects continued strong execution of initiatives, with targets of $1.8 billion in incremental EBIT contribution. - **2026 Targets:** $4.3 billion in incremental EBIT contribution from initiatives. - **Q2 2025 Guidance:** Flat to down 4% in RASM, up 1-2% in capacity, and $2.20-$2.30 in fuel cost per gallon. **Liquidity & Capital Resources:** - **Cash Position:** $8.3 billion in unrestricted cash and short-term investments. - **Debt:** $1.0 billion revolving credit facility, with no amounts outstanding. - **Share Repurchases:** $750 million in Q1 2025, with $1.5 billion remaining under authorization. **Risks & Challenges:** - **Macroeconomic Uncertainty:** Difficulty in forecasting due to recent booking trends. - **Operational Disruptions:** Potential fines and penalties from December 2022 operational disruption. - **Legal Proceedings:** Ongoing litigation and investigations, with no material adverse impact expected.