Southwest Airlines Co.’s first-quarter earnings soared amid positive hedging impacts and strong revenue growth.
Airlines have been cutting capacity to retain pricing power and flying fuller planes amid rising fuel costs. Southwest had warned it would likely post a rare first-quarter loss, which it did on an adjusted basis, weighed down by high fuel prices and wrinkles in integrating AirTran, which it acquired last year.
Passenger revenue per available seat mile, or Prasm, a key performance metric for the airline industry, rose 1.6% in the first quarter.
Traffic grew 23% from a year earlier while capacity rose 25%. Load factor, or the percentage of available seats filled, was 77.3% down from 78.3%.
Southwest reported earnings of $98 million, or 13 cents a share, up from $5 million, or a penny a share, a year earlier. Excluding acquisition and integration-related costs, hedging and fuel contract impacts and other items, the adjusted loss was two cents, compared with adjusted earnings of three cents.
Operating revenue jumped 29% to $4 billion, aided by the AirTran acquisition.
Analysts polled by Thomson Reuters had most recently forecast a loss of five cents on revenue of $4.01 billion.
By TESS STYNES And MELODIE WARNER
April 19th 2012