Southwest Airlines Beats Analyst Estimates on EPS

Southwest Airlines (NYSE: LUV  ) reported earnings on Jan. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Southwest Airlines met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly, and earnings per share grew significantly.

Margins dropped across the board.

Revenue details
Southwest Airlines reported revenue of $4.1 billion. The 10 analysts polled by S&P Capital IQ foresaw revenue of $4.1 billion. Sales were 32% higher than the prior-year quarter's $3.1 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.09. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.08 per share on the same basis. GAAP EPS of $0.20 for Q4 were 18% higher than the prior-year quarter's $0.17 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 21.5%, 350 basis points worse than the prior-year quarter. Operating margin was 4.5%, 240 basis points worse than the prior-year quarter. Net margin was 3.7%, 50 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.0 billion. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $17.4 billion. The average EPS estimate is $.81.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,515 members out of 1,760 rating the stock outperform, and 245 members rating it underperform. Among 377 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 333 give Southwest Airlines a green thumbs-up, and 44 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Southwest Airlines is outperform, with an average price target of $12.18.

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