Southwest Airlines’ Shares Drop 1.6% Despite Lower-Than-Expected Q3 Loss


Southwest Airlines (LUV), a passenger airline that provides scheduled air transportation in the United States and near-international markets, has reported a narrower-than-expected loss for the third quarter of 2021. Shares of the company declined 1.6% and closed at $48.66 on Thursday.

The company reported an adjusted loss of $0.23 per share, narrower than the Street’s expectations of a loss of $0.27 per share. The figure also compares favorably with an adjusted loss of $1.99 per share reported in the year-ago quarter. (See Southwest Airlines stock charts on TipRanks)

Operating revenue in the third quarter climbed 161% year-over-year to $4.7 billion. The figure surpassed the analyst’s expectations of $4.6 billion.

Economic fuel costs per gallon stood at $2.04 in the third quarter, as compared to $1.23 in the same quarter last year. Capacity increased 46.4% year-over-year due to increased flight activity.

The Chairman, CEO and President of Southwest Airlines, Nick Stanage, said, “With respect to our fourth quarter 2021 revenue outlook, while there are lingering effects from the summer COVID-19 surge and recent operational challenges, we are encouraged with renewed momentum in leisure and business traffic, revenues, and bookings—especially over the holidays. Except for higher fuel prices, fourth quarter 2021’s overall results are trending better than third quarter 2021.”

The company expects fourth-quarter revenue to be down 15% to 25% from the fourth quarter of 2019. Economic fuel cost per gallon is anticipated to be between $2.25 to $2.35.

Last week, Susquehanna analyst Christopher Stathoulopoulos maintained a Buy rating on Southwest Airlines with a price target of $60 (23.3% upside potential). (See Top Smart Score Stocks on TipRanks)

The Street has a Strong Buy consensus rating based on 16 Buys and 1 Hold. The average Southwest Airlines price target of $66.38 implies 36.4% upside potential from current levels.

By using TipRanks’ Website Traffic tool, which analyzes website traffic volume data provided by Semrush (SEMR), we can see that the clicks on Southwest Airlines’ website have been rising.

On a year-to-date basis, the number of total unique visitors to the company’s website from January 2021 to September 2021 has jumped 10.8% from the same period last year. (See Southwest Airlines’ website traffic on TipRanks)

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