Southwest Airlines reports a narrower than expected loss in fiscal Q1

Southwest Airlines Co. (NYSE: LUV) reported a narrower-than-expected loss in the fiscal first quarter on Thursday. The air carrier’s revenue, however, still fell shy of analysts’ estimates in Q1.

Southwest Airlines shares were reported more than 3% up in premarket trading on Thursday. Including the price action, the stock is now exchanging hands at £45.85 per share. In comparison, it had started the year at a much lower £32.47 per share.

Southwest Airlines’ Q1 financial results versus analysts’ estimates

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Southwest Airlines said its net income in the first quarter came in at £83.63 million that translates to 13.70 pence per share. In the comparable quarter of last year, it had posted £67.77 million of net loss, or 12.98 pence per share.

In separate news from the United States, Chipotle Mexican Grill also published its quarterly financial results on Wednesday after the bell.

Adjusted for one-time items, the world’s largest low-cost airline lost £1.24 per share. Southwest valued its revenue in Q1 at £1.48 billion that represents a massive 51.5% annualised decline. Southwest’s earnings report comes on the same day when peer American Airlines reported to have swung to a wider than expected loss in the first quarter.

According to FactSet, experts had forecast the company to record £1.49 billion of revenue in the recent quarter. Their estimate for adjusted per-share loss stood at a higher £1.33. At the time of writing, Southwest Airlines has a market capitalisation of £26.44 billion.

Southwest Airlines’ average daily cash burn stood at £9.37 million

The Dallas-headquartered company said load factor slipped to 64.3% in the first quarter, compared to 67.7% last year and 59.6% expected. Southwest Airlines burned £9.37 million daily on average in Q1. In the second quarter, it expects up to £2.88 million of average daily cash burn.  

Southwest now expects an up to 45% decline in revenue in April and 75% to 80% of load factor. In its previous guidance, it had expected an up to 55% decline in revenue this month and 70% to 75% of load factor. President Robert Isom said on Thursday:

“The pandemic is far from over. We have to continue to fight like never before and ensure that when the green flag drops, American is out in front. But as our world makes daily strides in COVID-19 vaccination efforts, customers are returning to travel, and there is no doubt the pace of the recovery is accelerating.”