EARNINGS ROUNDUP / SOUTHWEST
- Share via
Southwest Airlines Co. said it lost money in the fourth quarter as its fuel-hedging strategy, brilliant when oil prices were rising, lost punch with tumbling energy prices.
It was Southwest’s second straight losing quarter after a string of profitable quarters that reached back to early 1991.
The carrier is responding by cutting capacity 4% this year -- the first time in Southwest’s 38-year history that it hasn’t planned for growth -- and reining in fleet expansion.
Southwest lost $56 million, or 8 cents a share, in the fourth quarter, compared with a profit of $111 million, or 15 cents, a year earlier. The loss included net charges of $117 million related to the falling value of its fuel-hedging positions. Southwest has closed out most of its hedging deals.
Without the charges, however, Southwest would have earned $61 million, or 8 cents a share, which beat expectations of analysts surveyed by Thomson Reuters, who forecast a gain of 5 cents a share excluding special items.
Dallas-based Southwest said fourth-quarter revenue increased 9.7% to $2.73 billion, topping the $2.65-billion forecast of analysts.
Southwest shares rose $1.43, or 17.1%, to $9.81.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
