Southwest Airlines (NYSE:LUV) saw its stock rise slightly in premarket trading Thursday after the low-cost carrier unveiled better-than-anticipated Q4 earnings per share (EPS) and revenues.
Specifically, the company reported adjusted EPS of 37c for the fourth quarter, beating the consensus estimates of 12c. Revenue was reported at $6.8 billion, compared to expected $6.75 billion.
Operating revenue came in at $6.82 billion, up 11% year-over-year (YoY), and above the projected $6.74 billion. Passenger revenue stood at $6.21 billion, up 12% YoY and compared to $6.11 billion expected by analysts.
Southwest generated an adjusted operating income of $177 million, topping the consensus projection of $42.9 million.
Available seat miles (ASMs) hit 45.51 billion in the quarter, 21% higher than in the same period last year and above the estimated 45.33 billion.
The carrier anticipates a YoY increase of approximately 10% in ASMs for Q1 2024. Looking ahead to the full year 2024, the airline projects a YoY growth of about 6% in ASMs.
Further, Southwest foresees capital spending in 2024 ranging from $3.5 billion to $4 billion.
"Our 2024 plan leverages a set of initiatives which, most importantly, includes better aligning the route network to new demand patterns. While it is early in the first quarter, these initiatives are delivering value and we expect them to contribute roughly $1.5 billion in incremental year-over-year pre-tax profits,” said CEO Bob Jordan.
“As a result, we expect double-digit year-over-year operating revenue growth and year-over-year operating margin3 expansion. We expect our current initiatives to continue to deliver beyond 2024, and we are actively working on new initiatives,” he added.