Southwest Airlines (NYSE:LUV) Releases Quarterly Earnings Results, Beats Expectations By $0.42 EPS

Southwest Airlines (NYSE:LUV) announced its quarterly earnings data on Wednesday. The airline reported $0.94 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.52 by $0.42, FiscalAI reports. Southwest Airlines had a return on equity of 13.93% and a net margin of 2.78%.The firm had revenue of $8.72 billion for the quarter, compared to analysts’ expectations of $8.58 billion. During the same quarter in the prior year, the firm posted $0.43 earnings per share. Southwest Airlines’s revenue for the quarter was up 16.4% compared to the same quarter last year. Southwest Airlines updated its FY 2026 guidance to 3.250-4.250 EPS and its Q3 2026 guidance to 0.500-0.750 EPS.

Southwest Airlines Trading Up 0.5%

NYSE:LUV opened at $44.91 on Friday. Southwest Airlines has a 1-year low of $28.98 and a 1-year high of $55.11. The stock has a fifty day simple moving average of $45.88 and a 200 day simple moving average of $44.29. The firm has a market capitalization of $21.95 billion, a price-to-earnings ratio of 27.67, a price-to-earnings-growth ratio of 0.45 and a beta of 1.12. The company has a quick ratio of 0.41, a current ratio of 0.48 and a debt-to-equity ratio of 0.66.

Southwest Airlines Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, July 2nd. Stockholders of record on Thursday, June 11th were issued a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 1.6%. The ex-dividend date of this dividend was Thursday, June 11th. Southwest Airlines’s dividend payout ratio is currently 46.45%.

Analyst Upgrades and Downgrades

A number of research firms have recently issued reports on LUV. BMO Capital Markets raised their price target on shares of Southwest Airlines from $45.00 to $58.50 and gave the stock an “outperform” rating in a research report on Thursday, July 2nd. Jefferies Financial Group lifted their target price on Southwest Airlines from $44.00 to $50.00 and gave the company a “hold” rating in a research note on Wednesday, July 1st. Citigroup cut their price target on Southwest Airlines from $55.00 to $50.00 and set a “neutral” rating on the stock in a report on Friday. Zacks Research upgraded Southwest Airlines from a “strong sell” rating to a “hold” rating in a research note on Thursday, June 25th. Finally, BNP Paribas Exane boosted their target price on shares of Southwest Airlines from $24.00 to $33.00 and gave the company an “underperform” rating in a research note on Tuesday, April 21st. Nine research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat.com, Southwest Airlines has a consensus rating of “Hold” and a consensus price target of $49.33.

Trending Headlines about Southwest Airlines

Here are the key news stories impacting Southwest Airlines this week:

• Positive Sentiment: Southwest reported Q2 adjusted EPS of $0.94 versus $0.52 expected, with revenue of $8.72 billion topping estimates and rising 16.4% year over year, showing strong demand and improved execution.
• Positive Sentiment: The company highlighted record quarterly revenue, margin expansion, and stronger customer engagement from its new product initiatives, which supports the longer-term earnings story.
• Positive Sentiment: Southwest’s FY 2026 EPS guidance of $3.25 to $4.25 is above the current analyst average estimate, suggesting management still sees solid full-year profitability despite cost headwinds.
• Positive Sentiment: Southwest was upgraded to a Zacks Rank #2 (Buy), and Citi still sees upside from current levels even after trimming its target to $50 from $55.
• Neutral Sentiment: Citigroup lowered its price target on Southwest to $50 and kept a neutral rating, signaling the valuation is still reasonable but near-term upside may be limited.
• Negative Sentiment: Southwest’s Q3 EPS guidance of $0.50 to $0.75 came in below Wall Street expectations, which is a key reason the shares have fallen despite the earnings beat.
• Negative Sentiment: Rising jet fuel prices are a major headwind across the airline industry, and Reuters reported that fuel swings are forcing airlines to revise earnings expectations lower.
• Negative Sentiment: Southwest said fuel costs added roughly $889 million of pressure in the quarter and also reduced its full-year outlook, reinforcing concerns that higher fuel expenses could outweigh revenue gains.

Institutional Trading of Southwest Airlines

A number of hedge funds have recently modified their holdings of the business. Los Angeles Capital Management LLC acquired a new position in Southwest Airlines during the fourth quarter valued at $26,000. DV Equities LLC purchased a new stake in Southwest Airlines in the 4th quarter worth approximately $30,000. Quarry LP acquired a new position in Southwest Airlines in the fourth quarter worth approximately $35,000. IFC & Insurance Marketing Inc. bought a new stake in Southwest Airlines in the fourth quarter worth approximately $47,000. Finally, Strive Financial Group LLC acquired a new position in shares of Southwest Airlines during the 4th quarter worth $50,000. Hedge funds and other institutional investors own 80.82% of the company’s stock.

About Southwest Airlines

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest’s operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.