: Southwest Airlines stock drops toward a 9-year low after profit matches but revenue, load factor miss expectations
Shares of Southwest Airlines Co. LUV descended 4.7% toward a more-than nine-year low after the air carrier reported third-quarter profit that matched expectations but revenue and load factor that missed, and said leisure travel trends “appear to be returning to historically seasonal norms” in the fourth quarter. Net income fell to $193 million, or 31 cents a share, from $277 million, or 44 cents as share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 38 cents was the same as the FactSet consensus. Revenue rose 4.9% to $6.53 billion but was below the FactSet consensus of $6.57 billion. Load factor dropped to 80.7% from 85.4%, well below the FactSet consensus of 83.0%, as traffic rose 6.2% to 35.62 billion revenue passenger miles while capacity jumped 12.5% to 44.17 billion available seat miles. The company expects fourth-quarter revenue per available seat mile (RASM) to fall 9% to 11%. The stock, which was headed for the lowest open since March 2014, has plunged 34.9% over the past three months through Wednesday, while the U.S. Global Jets ETF JETS has shed 30.2% and the S&P 500 SPX has lost 8.3%.
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