Shares of Southwest Airlines Co. (NYSE: LUV) fell in pre-market trading on Thursday after the low-cost airliner reported an adjusted loss of $0.27 per diluted share for its first quarter versus a loss of $0.47 per share in the same period last year but wider-than-expected loss of $0.23 per share.
The airliner reported record first-quarter operating revenues of $5.7 billion in Q1, up by 21.6% year-over-year versus analysts’ expectations of $5.73 billion.
Bob Jordan, President, and CEO stated, “As expected, we incurred a first-quarter 2023 net loss that resulted from the negative financial impact of approximately $380 million pre-tax, or $294 million after-tax, related to the December 2022 operational disruption. The majority of this impact was driven by a negative revenue impact of approximately $325 million, as a result of cancellations of holiday return travel and a deceleration in bookings for January and February 2023 travel.”
Looking forward, management now expects to reduce its planned aircraft deliveries to 70 from 90 in 2023, ‘resulting in an approximate one-point decrease in year-over-year planned 2023 capacity.” LUV has projected revenue per available seat mile (RASM) to be down by 8% to 11% in fiscal Q2 while available seat miles (ASM) capacity is expected to be up by 14% year-over-year. In FY23, ASM capacity is likely to be up by between 14% and 15% year-over-year versus its prior estimate in the range of 15% to 16%.
Overall, Wall Street analysts rate LUV stock a Moderate Buy based on six Buys and six Holds each.
