July 28, 2021 8:00 AM
 — 
3
 min

Southwest Airlines Returns to Profits in Q2

buy

Southwest Airlines recorded net income of $ 348 million, or $ 0.57 per share, in the second quarter of 2021, thanks to a one-off payment of $ 724 million received under the government's anti-crisis employment program. A year earlier, Southwest Airlines had a net loss of $ 915 million, or $ 1.63 per share. The loss excluding one-off factors in April-June amounted to $ 206 million, or $ 0.35 per share. Market consensus assumed a loss of $ 0.23 per share. Southwest is the largest local airline in the United States and is considered by many to be the industry's pricing trendsetter. We maintain a positive outlook on the company's business.

TIKR
LUV


PRICE
51$

TARGET PRICE
67$

UPSIDE
31%

S&P 500
4,388(-0.14%)

WTI СRUDE
71,92(+0.38%)

10Y UST
1,234(0.00%)

BITCOIN
$3,896(+7.87%)

Southwest Airlines' quarterly revenues were $ 4 billion, quadrupled from the second quarter of last year, which was the peak of quarantine measures imposed worldwide due to the COVID-19 pandemic. Compared to the second quarter of 2019, revenue in April-June of this year was 32.2% lower. The market consensus forecast for Southwest Airlines' revenue was $ 3.939 billion.

Southwest Airlines had 82.9% flight load in the second quarter, up from 31.4% a year earlier. The company's management notes that Q2 2021 was an important milestone in business recovery after the coronavirus pandemic, as the demand for tourist travel increased. In June, Southwest Airlines reached profitable levels for the first time since the pandemic began with no incentive programs. The rapid recovery in demand for air travel is creating challenges for airlines, requiring them to step up operations and return to work. Southwest Airlines plans to withdraw the vast majority of its employees from voluntary vacations by the end of Q3 2021. We see long-term potential to recover the company's operational detail and recommend the issuer stock.

Southwest Airlines, a Dallas-based company, differentiates itself from other carriers with exemplary customer service delivered by more than 55,000 employees to more than 100MMcustomers annually. Southwest is the nation's largest carrier in terms of originating domestic passengers.

Request Access

By clicking the button you agree to the Privacy Policy
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Recent Posts
SEE ALL