Southwest's Revenue Falls 3.4%
October 26 2016 - 8:00AM
Dow Jones News
Southwest Airlines Co.'s revenue fell in the latest period, hurt
in part by a technology outage in August that plagued service, as
the carrier said Wednesday an important industry metric would
decline in the current quarter.
Unit revenue—an important metric in the airline industry that
measures the amount taken in per seat flown a mile—fell 4.1% in the
September quarter; Southwest guided for a 3% to 4% drop. For the
fourth quarter, which ends in December, the company expects unit
revenue to decline between 4% 5%.
The company said the outages in July dented revenue by $55
million, while a change in accounting methodology led to a one-time
special revenue adjustment of $172 million.
U.S. carriers have benefited from lower fuel expenses, but after
two years of record profitability, new capacity growth has pushed
unit revenues lower.
Over all, Southwest posted a profit of $388 million, or 62 cents
a share, down from $584 million or 89 cents a share, a year
earlier. Excluding special items, the company earned 93 cents a
share.
Revenue fell 3.4% to $5.14 billion.
Analysts surveyed by Thomson Reuters were looking for earnings
of 88 cents a share on $5.17 billion in revenue.
Shares fell 7% to $39 in light premarket trading.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
October 26, 2016 07:45 ET (11:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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