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WN Earns $76 Million for 1st Quarter

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  • WN Earns $76 Million for 1st Quarter

    NEW YORK (Reuters) -

    Southwest Airlines Co. (NYSE:LUV - News) on Thursday said first-quarter earnings nearly tripled as revenue climbed and the discount carrier's fuel hedges took the sting out of surging energy prices.

    The largest U.S. airline by market value reported profit of $76 million, or 9 cents a share, compared with $26 million, or 3 cents a share, a year earlier.


    Analysts on average were expecting earnings of 5 cents a share, according to Reuters Estimates.

    In trading before the market opened, the Dallas-based company's shares edged up to $15 on the Inet electronic brokerage from Wednesday's close of $14.72 on the New York Stock Exchange.

    Hedging, or the purchase of contracts that lock in prearranged prices of crude and heating oil, allowed Southwest to control 86 percent of its fuel costs, cutting energy expenses by $155 million in the first quarter.

    Analysts expect the airline industry as a whole to post losses of about $2 billion in the first quarter, on top of nearly $10 billion last year.

    [...]

    The company's first-quarter revenue rose 12.1 percent to $1.66 billion from $1.48 billion a year earlier.

    Southwest said its cost per available seat mile, a gauge of how much it spends to fly passengers, fell 1.5 percent to 7.70 cents from 7.82 cents.

    The company said it is 83 percent hedged for the second quarter, with fuel prices capped at $26 per barrel, or about half current market levels.

    The airline said it had $1.91 billion of cash on hand as of March 31, plus an available $575 million unsecured revolving credit line.


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  • #2
    So what its saying is that if WN didnt hedge fuel prices they would have lost quite a bit of money?

    Comment


    • #3
      That's correct. It's been that way the past few quarters. Without hedging WN would have lost about $79 million if I'm doing my math right. I wouldn't really say the loss would be "quite a bit" compared to the amount of loss the Legacies will be reporting over the next couple weeks.
      Follow me on Twitter! www.twitter.com/flyingphotog

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      • #4
        I heard on CNN this morning that most Wall Street analysts expect Southwest and JetBlue to be the only US airlines to report a profit for the previous quarter. Now to wait for JBLU....

        Comment


        • #5
          Originally posted by srbmod
          Now to wait for JBLU....
          Only until the 21st, the same day that AS, NW and DL report their losses.

          Comment


          • #6
            Originally posted by chrisburns
            So what its saying is that if WN didnt hedge fuel prices they would have lost quite a bit of money?
            Correct, but it is because of SMART and GOOD management unlike other airlines that Southwest thought ahead to hedge the fuel, this counts into good business management and work ethics, and it counts under the profit being made. The fact si they hedged it, and it IS a part of the financial plan, which makes them money.

            Alex
            Stop Searching. Start Traveling. southwest.com

            Comment


            • #7
              Originally posted by PT737SWA
              That's correct. It's been that way the past few quarters. Without hedging WN would have lost about $79 million if I'm doing my math right. I wouldn't really say the loss would be "quite a bit" compared to the amount of loss the Legacies will be reporting over the next couple weeks.
              Since CO and NW have only been losing about 79 million on average, i would say that if prices were not wedged that they are just doing as good of job.

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