Oct 23, 2014 8:01 AM
Southwest Airlines 3Q profit rises 27 percent
The Associated Press
DALLAS (AP) More passengers and lower fuel prices are pushing Southwest Airlines to record profits, and the airline expects an even bigger break at the gas pump this winter.
CEO Gary Kelly says the trend toward higher revenue has continued into October, and bookings for November and December look good.
Southwest Airlines Co. said Thursday that net income rose 27 percent to $329 million , or 48 cents per share, in the July-to-September quarter.
Excluding one-time items such as the falling value of some fuel-hedging contracts, the profit would have been 55 cents per share. On that basis, analysts expected 53 cents per share, according to FactSet.
Revenue rose 5.6 percent to $4.80 billion, a tick better than analysts' forecast of $4.79 billion.
The average one-way fare inched higher to $160.74, an increase of $1.35 from last summer. Passengers flew 5.6 percent more miles, and planes carried record loads the average flight was 84.4 percent full, an increase from 80.8 percent the year before.
Southwest spent $2.94 per gallon on fuel in the third quarter, down from $3.06 a year earlier. And the discount will grow the airline predicted that it will pay between $2.70 and $2.75 per gallon in the fourth quarter.
Fuel spending dropped 4.4 percent in the third quarter, but labor costs rose 7.2 percent.
Southwest Airlines shares rose 90 cents, or 2.6 percent, to $35.10 in premarket trading 90 minutes before the market opening.