Airline stocks are in focus today, after sector stalwarts American Airlines Group Inc (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV) stepped into the earnings confessional.
"Macroeconomic uncertainty" led Southwest Airlines to pull its guidance and cut capacity for the second half of the year, the carrier said on Wednesday.
Southwest Airlines Co (NYSE:LUV), American Airlines Group Inc (NASDAQ:AAL, ETR:A1G) and Alaska Air Group (NYSE:ALK) have joined other major US airline carriers in pulling their 2025 profit outlook amid economic uncertainty and weaker-than-expected travel demand. Handing down its first quarter earnings on Wednesday evening, Southwest noted difficulties in forecasting due to “short-lived booking trends.
Shares of Southwest Airlines (LUV) fell in premarket trading Thursday, a day after the carrier withdrew full-year earnings projections and said it was reducing capacity amid "macroeconomic uncertainty."
While the top- and bottom-line numbers for Southwest (LUV) give a sense of how the business performed in the quarter ended March 2025, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.
With little clarity on how consumers will behave in the face of a potentially worsening economy, airlines are struggling to accurately forecast their business.
Southwest Airlines (LUV) came out with a quarterly loss of $0.13 per share versus the Zacks Consensus Estimate of a loss of $0.18. This compares to loss of $0.36 per share a year ago.
A pullback in travel demand is hurting Southwest Airlines, and the airline pulled its full-year business projections given overall economic uncertainty.
Investors interested in the Transportation sector can look forward to the first-quarter 2025 earnings reports of WAB, ODFL, UNP, and LUV.
Let's assess the factors that are likely to have influenced LUV's first-quarter performance.
Besides Wall Street's top -and-bottom-line estimates for Southwest (LUV), review projections for some of its key metrics to gain a deeper understanding of how the company might have fared during the quarter ended March 2025.