SWA post 1stq PROFIT!
#21
SWA Q1 profit. A different spin.
I guess it depends where you read the news.....
Southwest Posts $43M First Quarter 2008 Profit
Today, Southwest reported first quarter 2008 Net Income excluding special items of $43 million, or $.06 per diluted share, compared to $33 million, or $.04 per diluted share, in first quarter 2007. Including special items of unrealized gains and losses from fuel contracts, Net Income for first quarter 2008 was $34 million, compared to $93 million for first quarter 2007.
Gary said: “Considering the weak economy and soaring jet fuel prices, we are very pleased to report a 30 percent year-over-year increase in first quarter 2008 earnings, excluding special items. Our earnings growth resulted from record first quarter 2008 operating revenues of $2.53 billion, which increased a strong 15.1 percent from a year ago, or 8.2 percent on an available seat mile (ASM) basis. Benefiting from the Easter shift to March this year (versus April last year), this was the best quarterly performance since second quarter 2006. With our new revenue initiatives well underway, our load factor of 69.8 percent was a record first quarter performance, and our passenger yields per revenue passenger mile (RPM) were up 4.7 percent compared to first quarter 2007.
“Taking into account the Easter shift to March, traffic thus far in April has been solid, and bookings for the remainder of second quarter 2008 appear strong. Barring a further slowdown in the domestic economy, based on current trends, which include encouraging results from our revenue initiatives and the airline industry’s domestic capacity outlook, we expect favorable year-over-year unit revenue results again in second quarter 2008.
“While we are pleased with our revenue performance, we are concerned about soaring energy costs. Our first quarter 2008 unit costs, excluding special items, increased 7.3 percent due largely to the significant increase in our economic jet fuel costs. Even with $302 million in favorable cash settlements from derivative contracts, our first quarter 2008 economic jet fuel costs increased 20.7 percent to $1.98 per gallon. We have derivative contracts in place for approximately 70 percent of our second quarter 2008 estimated fuel consumption, capped at an average crude-equivalent price of approximately $51 per barrel. Based on this derivative position and yesterday’s market prices, we currently anticipate our second quarter 2008 economic jet fuel costs will be in the $2.35 per gallon range, significantly higher than first quarter even with anticipated hedging gains significantly higher than first quarter.
“Our first quarter 2008 unit costs, excluding fuel, increased 2.4 percent over last year, which was better than we anticipated. Based on current cost trends, we expect our second quarter 2008 unit costs, excluding fuel, to increase from first quarter 2008’s 6.70 cents.
“Although we are pleased with the progress of our revenue initiatives and optimistic that we can continue to grow revenues, we cannot ignore the threat of volatile and unprecedented jet fuel prices. We will continue to take steps to restore our profit margins, including an ongoing rigorous review of our flight schedule to eliminate nonproductive flying. Presently, we still plan to accept 29 new Boeing 737-700s in 2008, but we are reviewing our previous plan to retire 22 aircraft in light of this month’s dramatic industry developments. We have flexibility to adjust our fleet plans and are well-positioned to respond to a rapidly changing environment.
“For 2009, we have decided to reduce our fleet growth. Prior to today’s announcement, we had 28 737-700 aircraft (25 firm and three options) scheduled for delivery from Boeing in 2009. Our revised plan is to grow our fleet in 2009 by no more than 14 737-700 aircraft, which is half our previous plan, assuming no retirements, and will bring our 2009 year-over-year ASM capacity growth to two to three percent.”
Southwest Posts $43M First Quarter 2008 Profit
Today, Southwest reported first quarter 2008 Net Income excluding special items of $43 million, or $.06 per diluted share, compared to $33 million, or $.04 per diluted share, in first quarter 2007. Including special items of unrealized gains and losses from fuel contracts, Net Income for first quarter 2008 was $34 million, compared to $93 million for first quarter 2007.
Gary said: “Considering the weak economy and soaring jet fuel prices, we are very pleased to report a 30 percent year-over-year increase in first quarter 2008 earnings, excluding special items. Our earnings growth resulted from record first quarter 2008 operating revenues of $2.53 billion, which increased a strong 15.1 percent from a year ago, or 8.2 percent on an available seat mile (ASM) basis. Benefiting from the Easter shift to March this year (versus April last year), this was the best quarterly performance since second quarter 2006. With our new revenue initiatives well underway, our load factor of 69.8 percent was a record first quarter performance, and our passenger yields per revenue passenger mile (RPM) were up 4.7 percent compared to first quarter 2007.
“Taking into account the Easter shift to March, traffic thus far in April has been solid, and bookings for the remainder of second quarter 2008 appear strong. Barring a further slowdown in the domestic economy, based on current trends, which include encouraging results from our revenue initiatives and the airline industry’s domestic capacity outlook, we expect favorable year-over-year unit revenue results again in second quarter 2008.
“While we are pleased with our revenue performance, we are concerned about soaring energy costs. Our first quarter 2008 unit costs, excluding special items, increased 7.3 percent due largely to the significant increase in our economic jet fuel costs. Even with $302 million in favorable cash settlements from derivative contracts, our first quarter 2008 economic jet fuel costs increased 20.7 percent to $1.98 per gallon. We have derivative contracts in place for approximately 70 percent of our second quarter 2008 estimated fuel consumption, capped at an average crude-equivalent price of approximately $51 per barrel. Based on this derivative position and yesterday’s market prices, we currently anticipate our second quarter 2008 economic jet fuel costs will be in the $2.35 per gallon range, significantly higher than first quarter even with anticipated hedging gains significantly higher than first quarter.
“Our first quarter 2008 unit costs, excluding fuel, increased 2.4 percent over last year, which was better than we anticipated. Based on current cost trends, we expect our second quarter 2008 unit costs, excluding fuel, to increase from first quarter 2008’s 6.70 cents.
“Although we are pleased with the progress of our revenue initiatives and optimistic that we can continue to grow revenues, we cannot ignore the threat of volatile and unprecedented jet fuel prices. We will continue to take steps to restore our profit margins, including an ongoing rigorous review of our flight schedule to eliminate nonproductive flying. Presently, we still plan to accept 29 new Boeing 737-700s in 2008, but we are reviewing our previous plan to retire 22 aircraft in light of this month’s dramatic industry developments. We have flexibility to adjust our fleet plans and are well-positioned to respond to a rapidly changing environment.
“For 2009, we have decided to reduce our fleet growth. Prior to today’s announcement, we had 28 737-700 aircraft (25 firm and three options) scheduled for delivery from Boeing in 2009. Our revised plan is to grow our fleet in 2009 by no more than 14 737-700 aircraft, which is half our previous plan, assuming no retirements, and will bring our 2009 year-over-year ASM capacity growth to two to three percent.”
#22
HOSED BY PBS AGAIN
Joined APC: Mar 2005
Posts: 1,713
Not jealous at all, but I remember when Pan Am, Eastern, DAL, UAL, etc., were at the top of their game too, and when the cards came tumbling down, a lot of people were humbled. I have a lot of friends at SWA and I only wish them the best, but the playing field is starting to level (believe it or not), and when the hedges do run out, I think some at SWA are in for a major awakening.
#23
#24
HOSED BY PBS AGAIN
Joined APC: Mar 2005
Posts: 1,713
Now why on earth would such a well "hedged" management guy say something so contrary to what many on this forum are posting? I guess Gary isn't as smart as some on this forum...........
#25
#28
Maybe because we are in negotiations now. Is this the No life GL's brother from FI. The hedges ran out in 2003, 04, 05, 06, 07. They will run out in 08, 09, 10, 11 etc. You are a sad little boy. Just remeber if we have hard times what the heck will that mean for your airline? Wrap your little head around that one.
#29
Gets Weekends Off
Joined APC: Apr 2008
Posts: 128
SWA is a great company because of the people who run it as well as the people who work there!!! There are some (ewrbasedpilot) who can't get a grip on that concept. I suspect if they had a job offer with SWA they would take it, but for obvious reasons that will probably never happen. Remember, attitude is 99% of the solution. Period!!!!!!!
#30
Gets Weekends Off
Joined APC: Dec 2005
Posts: 839
I think SWA is a good company, but not everyone wants to work there. I didn't even bother filling out an app.
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