Southwest Airlines is experiencing some positive trends with improvements in industry demand, successful implementation of new revenue streams, and operational excellence. However, these are offset by macroeconomic challenges and initial issues with the basic economy rollout. The company's balance sheet remains strong with strategic initiatives in place to drive future growth.

Company Guidance -

Q3 2025

During the Southwest Airlines Second Quarter 2025 Conference Call, the company provided detailed guidance on its financial expectations and strategic initiatives. The airline updated its full-year EBIT guidance to a range of $600 million to $800 million, revised down from a previous estimate of $1.7 billion. This adjustment reflects a nearly $1 billion impact from a challenging macroeconomic environment and a $100 million hit from increased fuel costs. Despite these headwinds, Southwest is optimistic about its future, projecting a robust EBIT expansion in 2026 driven by its $1.8 billion slate of initiatives. These initiatives include the introduction of checked bag fees, the launch of a basic economy product, and enhancements to its credit card offerings, all of which are expected to drive incremental revenue. Additionally, Southwest is implementing operational improvements, such as retrofitting aircraft for extra legroom seating and expanding its network through strategic partnerships. The airline also announced a new $2 billion share repurchase program, underscoring its confidence in its transformational plan and its ability to deliver significant shareholder value.

Industry Demand Improvement

The company reports signs of improvement in industry demand, with bookings showing clear signs of recovery.

Implementation of New Revenue Streams

Southwest Airlines has begun charging fees for checked bags, reintroduced expiration of flight credits, and implemented a basic economy product, which have exceeded revenue expectations.

Operational Excellence

The company led the industry in on-time performance for the first half of the year and maintained a strong completion factor, canceling fewer flights compared to peers.

Successful Strategic Partnerships

Partnerships with Chase and Icelandair have been launched successfully and are exceeding expectations, with Expedia now representing roughly 5% of passenger volume.

Strong Balance Sheet and Share Repurchase Program

The company maintains a strong investment-grade balance sheet and announced a new $2 billion share repurchase program.

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)	-0.05 / -	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.