Southwest Airlines reports second-quarter profit
Monday, July 21st 2003, 12:00 am
By: News On 6
DALLAS (AP) _ Low-fare carrier Southwest Airlines Co. doubled its second quarter earnings to log its 49th consecutive profitable quarter, exceeding Wall Street estimates.
Second-quarter net income for Southwest, the only major U.S. carrier to remain profitable the past two years, totaled $246 million, or 30 cents per share, up from $102 million, or 13 cents per share, in the same period in 2002.
The figures included a $271 million cash infusion from the federal government. Excluding that and other special items, the Dallas-based carrier earned $103 million, or 13 cents per share, compared with second quarter 2002 operating income of $84 million, or 10 cents per share. Analysts surveyed by Thomson First Call had expected quarterly earnings of 12 cents per share in the latest period.
Revenue grew 3 percent to $1.52 billion from $1.47 billion a year earlier.
Results also included an additional $36 million in passenger revenue from a reduction in estimated future refunds and exchanges.
``Considering the challenges we faced in second quarter with the Iraq war and the difficult airline industry pricing environment, we are proud of our better than expected earnings performance,'' James F. Parker, Southwest vice chairman and chief executive officer, said in a statement accompanying the results.
Parker said softer bookings early in the quarter resulted from the war in Iraq, but traffic and revenues started improving in mid-June. High demand for vacation travel is keeping traffic and load factors this month and bookings for the rest of July and August strong, he said.
But the economic outlook remained uncertain, Parker said, with airline officials concerned about travel demand post-Labor Day.
``Based on our current revenue and cost outlook and barring any unforeseen event, we expect third quarter 2003 earnings to exceed third quarter 2002 earnings of $75 million, which included a federal grant of $48 million,'' Parker said.
For the first six months of the year, Southwest reported a $270 million profit, equating to 33 cents per share, up from $123 million, or 15 cents per share, in the first half of 2002. Revenue rose 5 percent to $2.87 billion from $2.73 billion.