Shares of Southwest Airlines were hit hard in early Thursday trading before recovering slightly. Investors were expressing concern over slower unit revenue growth.
Despite reporting better-than-expected quarterly earnings and revenue Thursday, the stock was down more than 7 percent at one stage.
Here’s what Southwest reported versus what Wall Street was expecting:
- Earnings per share: $1.24 adjusted compared with $1.20 expected, according to Thomson Reuters
- Revenue: $5.74 billion vs. $5.72 billion Thomson Reuters estimate
Unit revenue grew at the Dallas-based airline, but more slowly than other airlines. Southwest reported 1.5 percent growth in the second quarter.
“We did 1.5 [percent] over last year, considering that we had a brand-new reservation system,” Southwest Chairman and CEO Gary Kelly told CNBC shortly after the airline released results.
Excluding special items, second-quarter net income was $748 million compared with $757 million in the year-earlier period. Total operating revenue increased 6.7 percent.
Kelly was confident about the future after what he called “a really solid performance,” saying in a “Squawk on the Street” interview “there’s nothing different at Southwest today than three months ago.”
Source: Investment Cnbc
Southwest Airlines shares sink on unit revenue growth concerns