Leading U.S. carrier Southwest Airlines Co. LUV reported impressive first-quarter 2015 financial numbers. The company reported earnings of 66 cents a share, surpassing the Zacks Consensus Estimate of 64 cents.
Quarterly revenues moved up 6% year over year to $4,414 million, ahead of the Zacks Consensus Estimate of $4,405 million. On a year-over-year basis, Passenger and Freight revenues increased 6.2% and 10%, respectively, while Other revenues fell 0.5%.
Operating Statistics
Airline traffic, measured in billions of revenue passenger miles, increased 7.1% year over year to 25.86 billion in the first quarter. Capacity or available seat miles decreased 6% to 32.29 billion, while load factor (percentage of seats filled with passengers) was 80.1% against 79.3% in the year-ago quarter. Passenger revenue per available seat mile (PRASM) increased 0.3% year over year to 12.94 cents.
Operating Expenses & Income
In the first quarter, adjusted operating income scaled up to $770 million from $242 million a year ago. Total adjusted operating expenses fell 7.1% year over year to $3,644 million. Fuel price (economic) stood at $2 per gallon, down from $3.08 a year ago. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, oil and special items, decreased 0.1% year over year to 8.58 cents.
Liquidity
At the end of the first quarter, Southwest Airlines had $3,438 million in cash and short-term investments against $2,988 million at the end of 2014. The company had long-term debt (including current portion) of $2,416 million against $2,434 million at the end of 2014. Southwest Airlines generated operating cash flow of $1,452 million in the reported quarter against $1,119 million.
Stocks to Consider
Southwest Airlines currently holds a Zacks Rank #2 (Buy). Better-ranked stocks in the industry include JetBlue Airways Corp. JBLU, Ryder System Inc. R and Hawaiian Holdings Inc. HA.
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