Southwest Airlines is undergoing a significant transformation with the introduction of new products and enhancements, showing strong operational execution and strategic expansion. However, the company faces challenges from a weaker macroeconomic environment and initial hiccups in the rollout of its basic economy product. Despite these challenges, the overall sentiment leans towards cautious optimism, supported by strong capital allocation and operational improvements.

Company Guidance -

Q3 2025

During the Southwest Airlines Second Quarter 2025 Conference Call, the company provided guidance with a focus on their transformational plan and financial outlook. They updated their full-year EBIT guidance to between $600 million and $800 million, revised from a previous $1.7 billion, citing a $1 billion decrease due to a weakening macroeconomic environment and a $100 million impact from higher fuel costs. The company reiterated its expectation of $1.8 billion in EBIT contribution from ongoing initiatives in 2025, with these initiatives expected to drive significant EBIT expansion in 2026. The guidance also highlighted a $2 billion share repurchase program to be completed over two years, underscoring their belief in the transformational plan and management's ability to deliver shareholder value. The airline reported a disciplined approach to cost management and set a liquidity target of $4.5 billion, maintaining a robust balance sheet to support future initiatives.

Introduction of Bag Fees and Basic Economy

Southwest Airlines successfully implemented bag fees and a basic economy product on May 28, which have exceeded revenue expectations and had no negative impact on operations.

Transformation and New Initiatives

Southwest is on a transformational journey, with the introduction of assigned and premium seating set to begin on January 27. The company has also launched new benefits for its Chase co-branded credit cards.

Industry-Leading On-Time Performance

Southwest Airlines led the industry in on-time performance for the first half of 2025, reflecting strong operational management.

Strong Capital Allocation and Share Repurchase

The Board of Directors authorized a new $2 billion share repurchase program over the next two years, reflecting confidence in the company's strategic plan and financial health.

Improved Aircraft Utilization

Southwest Airlines exceeded 2019 aircraft utilization levels through the introduction of red-eye flights and other operational efficiencies.

Expansion Initiatives

Southwest announced new services to St. Thomas and formed new partnerships with Icelandair and China Airlines, expanding its network.

Southwest Airlines (LUV) Earnings, Revenues Date & History

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LUV Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Oct 23, 2025	2025 (Q3)	-0.04 / -	0.15	―	―	―
Jul 23, 2025	2025 (Q2)	0.51 / 0.43	0.58	-25.86% (-0.15)	―
Apr 23, 2025	2025 (Q1)	-0.18 / -0.13	-0.36	63.89% (+0.23)	―
Jan 30, 2025	2024 (Q4)	0.46 / 0.56	0.37	51.35% (+0.19)	―
Oct 24, 2024	2024 (Q3)	0.05 / 0.15	0.38	-60.53% (-0.23)	―
Jul 25, 2024	2024 (Q2)	0.52 / 0.58	1.09	-46.79% (-0.51)	―
Apr 25, 2024	2024 (Q1)	-0.34 / -0.36	-0.27	-33.33% (-0.09)	―
Jan 25, 2024	2023 (Q4)	0.12 / 0.37	-0.38	197.37% (+0.75)	―
Oct 26, 2023	2023 (Q3)	0.38 / 0.38	0.5	-24.00% (-0.12)	―
Jul 27, 2023	2023 (Q2)	1.09 / 1.09	1.3	-16.15% (-0.21)	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

LUV Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Jul 23, 2025	$37.44	$33.26	-11.16%
Apr 23, 2025	$25.37	$26.31	+3.71%
Jan 30, 2025	$31.28	$30.90	-1.21%
Oct 24, 2024	$30.21	$28.53	-5.56%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.