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Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 11:07 am
by JammyBritton27
For the quarter, total operating revenues rose by 4.1% year-over-year to reach $5.1 billion. Southwest pointed out several unexpected events during first quarter 2019 that contributed to a negative revenue impact of more than $200 million.
RASM, or unit revenues, inched 2.7% higher on a 2.6% passenger revenue yield bump, while quarterly load factor slipped one-half point to 81%.
Net profit sank 16.4% to $387 million, while the carrier posted 11.4% lower earnings of 70 cents per diluted share. On an adjusted basis, earnings fell 6.7% to $0.70 per share.
Operating margin of 9.8% and net margin of 7.5%.
Operating cash flow of $1.1 billion, and free cash flow of $945 million.
Returned $678 million to Shareholders through share repurchases and dividends.

Full article: https://news.alphastreet.com/southwest- ... ng-airbus/

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 12:29 pm
by WeatherPilot
So they had to park ~5% of their fleet, dealt with numerous cancellations and only lost $15 Million in net profit.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 1:11 pm
by tphuang
all things consider, pretty good quarter for WN.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 1:49 pm
by Midwestindy
WeatherPilot wrote:
So they had to park ~5% of their fleet, dealt with numerous cancellations and only lost $15 Million in net profit.


The parking will have a much larger impact on Q2 than it did on Q1

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 2:03 pm
by musman9853
the max grounding is gonna screw over a bunch of investors, me thinks.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 2:26 pm
by MIflyer12
WeatherPilot wrote:
So they had to park ~5% of their fleet, dealt with numerous cancellations and only lost $15 Million in net profit.


$15 million? Net income was down $76 million, and the MAX grounding started March 13.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 2:47 pm
by VetteDude
musman9853 wrote:
the max grounding is gonna screw over a bunch of investors, me thinks.


Probably not, it's already pretty priced in (which is why Southwest has lagged the other airlines slightly lately). Even Boeing's stock hasn't been beaten down too badly. As long as they come back into service, the market will look the other way for an extraordinary circumstance like this.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 2:54 pm
by lightsaber
WeatherPilot wrote:
So they had to park ~5% of their fleet, dealt with numerous cancellations and only lost $15 Million in net profit.

Yes. A good quarter. Ho hum.

It is good when being constantly good is boring.

Lightsaber

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 2:57 pm
by WeatherPilot
MIflyer12 wrote:
WeatherPilot wrote:
So they had to park ~5% of their fleet, dealt with numerous cancellations and only lost $15 Million in net profit.


$15 million? Net income was down $76 million, and the MAX grounding started March 13.


I'm Inferring from the report that the $200 million in unexpected revenue loss is the parking of the 737Max fleet. The margin on that revenue would be around 15

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 3:30 pm
by musman9853
VetteDude wrote:
musman9853 wrote:
the max grounding is gonna screw over a bunch of investors, me thinks.


Probably not, it's already pretty priced in (which is why Southwest has lagged the other airlines slightly lately). Even Boeing's stock hasn't been beaten down too badly. As long as they come back into service, the market will look the other way for an extraordinary circumstance like this.


well yeah in the long term its not gonna matter. but in the short term itll hurt

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 4:19 pm
by dmg626
Gary was on CNBC this morning, was asked something to the effect of Boeing paying or making deal for the loss and he said they’re in negotiations. So maybe some really good deals down the line to make up for losses?

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 5:08 pm
by STT757
They’re getting my money today, I’m in ATL right now making a connection because they cut they’re EWR-Florida flying. At least bring back EWR-MCO, or add EWR-ATL. ATL is busy for WN, but there are a few adds like EWR they can make.


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Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 5:34 pm
by ScottB
I'm a bit concerned about the guidance for 2Q. They expect CASM ex-fuel/profitsharing to increase by 10.5-12.5% year-over-year and fuel costs look to be roughly flat. That implies a CASM increase of just under a penny -- I'm assuming right around 12.5 cents vs. 11.58 cents last year. Based on the mid-point prediction (6.5%) of RASM increase, they should see a RASM increase around 0.85 cents compared to 2018Q2's 13.23 cents -- call it 14.1 cents. That implies a drop in operating margin to ~11.3% vs. last year's 12.5%.

Granted, it's not unexpected to see impacts from the MAX grounding as well as the cost of starting up Hawaii service, but the cost guidance still bothers me.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 9:25 pm
by tphuang
keep in mind that a lot of the MAX cuts for the summer are on the few transcon routes that WN do operate. Those routes tend to lower CASM and RASM. So it's to be expected that with shorter overall stage length, you will see CASM and RASM increase. Now, it would be helpful if airlines can provide stage adjusted CASM. And then, we can see how much max grounding and HI service is hurting the costs.

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 10:26 pm
by Veigar
So long story short - nothing too notable here?

Re: Southwest posts Q1 2019 earnings

Posted: Thu Apr 25, 2019 11:46 pm
by airliner371
STT757 wrote:
They’re getting my money today, I’m in ATL right now making a connection because they cut they’re EWR-Florida flying. At least bring back EWR-MCO, or add EWR-ATL. ATL is busy for WN, but there are a few adds like EWR they can make.


Sent from my iPhone using Tapatalk

They opted for the much shorter EWR-BWI route but I agree - 2 daily EWR-ATL would be a no brainer.

Re: Southwest posts Q1 2019 earnings

Posted: Fri Apr 26, 2019 2:09 am
by tphuang
airliner371 wrote:
STT757 wrote:
They’re getting my money today, I’m in ATL right now making a connection because they cut they’re EWR-Florida flying. At least bring back EWR-MCO, or add EWR-ATL. ATL is busy for WN, but there are a few adds like EWR they can make.


Sent from my iPhone using Tapatalk

They opted for the much shorter EWR-BWI route but I agree - 2 daily EWR-ATL would be a no brainer.

WN is a pretty well run company. They are not going to fly that kind of route.