Track market-moving stories before they get noisy

Posted by Defense World Staff on Jul 25th, 2026

Arrowstreet Capital Limited Partnership reduced its holdings in shares of Southwest Airlines Co. (NYSE:LUV – Free Report) by 37.6% during the 1st quarter, according to the company in its most recent 13F filing with the SEC. The institutional investor owned 4,858,283 shares of the airline’s stock after selling 2,932,884 shares during the period. Arrowstreet Capital Limited Partnership owned about 0.99% of Southwest Airlines worth $182,526,000 at the end of the most recent reporting period.

A number of other hedge funds have also modified their holdings of LUV. SHP Wealth Management acquired a new stake in shares of Southwest Airlines during the fourth quarter worth approximately $25,000. GHP Investment Advisors Inc. acquired a new position in Southwest Airlines in the fourth quarter valued at approximately $26,000. Entrust Financial LLC acquired a new position in Southwest Airlines in the fourth quarter valued at approximately $26,000. Los Angeles Capital Management LLC bought a new position in Southwest Airlines in the fourth quarter valued at approximately $26,000. Finally, Optima Capital LLC bought a new position in Southwest Airlines in the fourth quarter valued at approximately $27,000. 80.82% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades Several analysts have commented on the stock. JPMorgan Chase & Co. dropped their target price on shares of Southwest Airlines from $60.00 to $59.00 and set an “overweight” rating for the company in a research report on Friday. Jefferies Financial Group lifted their price objective on Southwest Airlines from $44.00 to $50.00 and gave the stock a “hold” rating in a research note on Wednesday, July 1st. Wells Fargo & Company upped their price objective on Southwest Airlines from $44.00 to $50.00 and gave the company an “equal weight” rating in a report on Tuesday, June 30th. Evercore increased their target price on Southwest Airlines from $44.00 to $52.00 in a research note on Thursday, June 25th. Finally, TD Cowen raised their target price on Southwest Airlines from $47.00 to $53.00 and gave the stock a “buy” rating in a report on Thursday, July 2nd. Nine research analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have assigned a Sell rating to the company. According to data from MarketBeat.com, Southwest Airlines has an average rating of “Hold” and a consensus target price of $49.55.

Read Our Latest Stock Report on LUV

Key Headlines Impacting Southwest Airlines Here are the key news stories impacting Southwest Airlines this week:

Positive Sentiment: BMO Capital Markets raised its price target on Southwest Airlines to $60 from $58.50 and reiterated an outperform rating, signaling confidence in further upside after the company’s earnings beat. Benzinga report Positive Sentiment: Barclays kept a buy rating on Southwest Airlines, reinforcing the bullish view from analysts following the airline’s latest quarter. Barclays article Positive Sentiment: Southwest reported second-quarter adjusted EPS of $0.94, well above estimates, and record quarterly revenue, showing improved earnings power and solid demand. Yahoo Finance report Positive Sentiment: Several earnings recaps highlighted stronger fares, commercial gains, and margin expansion, suggesting the company’s transformation efforts are starting to show through in results. Zacks report Southwest Airlines Stock Performance Shares of LUV stock opened at $45.19 on Friday. Southwest Airlines Co. has a 12 month low of $28.98 and a 12 month high of $55.11. The company’s fifty day simple moving average is $46.01 and its 200-day simple moving average is $44.29. The firm has a market cap of $22.09 billion, a PE ratio of 27.72, a P/E/G ratio of 0.37 and a beta of 1.12. The company has a quick ratio of 0.41, a current ratio of 0.49 and a debt-to-equity ratio of 0.54.

Southwest Airlines (NYSE:LUV – Get Free Report) last released its earnings results on Wednesday, July 22nd. The airline reported $0.94 earnings per share for the quarter, beating analysts’ consensus estimates of $0.52 by $0.42. Southwest Airlines had a net margin of 2.78% and a return on equity of 14.15%. The business had revenue of $8.72 billion during the quarter, compared to the consensus estimate of $8.58 billion. During the same quarter last year, the firm earned $0.43 earnings per share. The firm’s revenue for the quarter was up 16.4% compared to the same quarter last year. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. Equities research analysts expect that Southwest Airlines Co. will post 3.67 EPS for the current fiscal year.

Southwest Airlines Dividend Announcement The business also recently disclosed a quarterly dividend, which was paid on Thursday, July 2nd. Stockholders of record on Thursday, June 11th were issued a $0.18 dividend. The ex-dividend date was Thursday, June 11th. This represents a $0.72 annualized dividend and a dividend yield of 1.6%. Southwest Airlines’s dividend payout ratio (DPR) is presently 44.17%.

Southwest Airlines Company Profile (Free Report)

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest’s operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.

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MarketBeat Week in Review – 07/06 - 07/10Southwest Airlines NYSE: LUV reported sharply higher second-quarter 2026 earnings and record revenue, with executives saying the carrier’s recent commercial transformation contributed across the full quarter for the first time.

President and Chief Executive Officer Bob Jordan said the quarter showed “the earnings power of our business” and demonstrated that Southwest now has “a broader and more diversified set of revenue and commercial levers than at any point in our history.”

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Southwest MAX Incident Revives Headline Risk for Boeing and Airline StocksThe airline reported adjusted earnings per share of $0.94, up approximately 120% from a year earlier and above both its initial guidance and analyst consensus, according to Jordan. Adjusted operating margin was 6.7%, a 3.3-point improvement year over year, while after-tax return on invested capital was 9%.

Southwest said adjusted operating revenue rose 20.3% on capacity growth of just 0.2%, reaching a quarterly record of $8.7 billion. Adjusted unit revenue increased 20.1% year over year, also reaching what Jordan described as an all-time quarterly record and exceeding the high end of the company’s prior guidance range.

Revenue Initiatives Drive Record Results These 3 Stocks Lowered Their Share Counts Drastically in Q1Jordan and Chief Commercial Officer Justin Jones attributed the revenue gains to a mix of new and expanded initiatives, including product changes, bag fees, online travel agencies, change-related revenue and strength in the core business.

Managed business revenue rose 30% year over year to a new quarterly record, surpassing the prior record set in the first quarter. Jordan said customer engagement also improved, with Rapid Rewards new member enrollments up 35% year over year and the program approaching nearly 100 million members. Tier qualification activity reached a record high, while Chase co-branded credit card acquisitions increased 28% from a year earlier.

Jones said the company is focused on building a “more productive commercial business” that balances unit revenue growth, disciplined capacity, network profitability and long-term customer engagement. He said corporate customers have shown strong adoption of the company’s new products, with growth visible across fares, load factor and share of origin-and-destination mix.

In response to analyst questions about the impact of lapping initiatives introduced in 2025, Jordan said third-quarter comparisons will face a headwind from those actions, including bag fees, which he said represent about $1 billion annually. He said that excluding the impact of those comparisons, Southwest’s third-quarter unit revenue guidance would be ahead of the second-quarter result.

Guidance Updated as Fuel Costs Remain Elevated Southwest now expects full-year 2026 adjusted earnings per share of $3.25 to $4.25. Jordan said the updated range replaces the company’s prior expectation of at least $4 per share and reflects the forward fuel curve as of July 17, while assuming the current fare environment and demand trends remain broadly intact.

Jordan said the company faced an estimated year-to-date fuel headwind of approximately $1.33 per share but remains positioned to generate earnings broadly in line with the guidance it issued at the start of the year. Second-quarter fuel expense increased nearly $900 million year over year, and fuel averaged $3.92 per gallon during the quarter.

Chief Financial Officer Tom Doxey said Southwest generated $500 million of operating cash flow in the quarter, up more than 32% year over year, and nearly $2 billion in operating cash flow during the first half. The company ended the quarter with $5.3 billion in liquidity, above its target of approximately $4.5 billion. Its gross leverage ratio was 2.1 times, within its stated range of 1 to 2.5 times and improved from 2.4 times at the end of 2025.

For the third quarter, Southwest expects unit revenue to rise 17.5% to 19.5% year over year. The company expects CASM-X, or unit costs excluding fuel and special items, to increase 3.5% to 4% year over year on capacity that is flat to down 1%.

Cost Discipline and Fleet Actions Support Margins Doxey said cost savings are being generated across the business, including technology, supply chain, maintenance and labor productivity. He said management has identified “hundreds of millions of dollars of incremental savings” since the start of the year, and those savings are incorporated into the full-year outlook.

Second-quarter CASM increased 3.4% year over year on near-flat capacity, below the low end of prior guidance, Jordan said. Doxey also discussed gains from aircraft sales, saying Southwest views divestment of retiring assets as a durable strength. He said the company has more than 450 NG aircraft that will be retired over many years, and that gains on sales may be “a little lumpy by quarter” but should continue over time.

Asked about capital spending and free cash flow, Doxey said operating cash flow should improve as underlying profitability improves, while the conversion to free cash flow will depend largely on the timing of aircraft deliveries. He said Southwest generally pays cash or uses unsecured or secured financing for aircraft, rather than relying on leasing structures that would reduce net capital expenditures.

Operations, Network and Product Enhancements Chief Operating Officer Andrew Watterson said Southwest ranked first among large domestic carriers in completion factor during the quarter and improved its mishandled baggage performance year over year, despite higher volumes of gate-checked bags. He said trip net promoter score improved throughout the quarter and that Southwest maintained the lowest customer complaint rate among major U.S. airlines.

Watterson acknowledged that on-time performance has declined in some areas, particularly during day-to-day “small-scale events” tied to high load factors and turn times. He said the company is focused on improving the last 10 minutes of aircraft turns and has already seen some benefits in July, with additional schedule changes expected in October.

Southwest also highlighted several product and network updates. Jordan said the airline’s first Starlink-equipped aircraft entered service a few weeks before the call, beginning a new phase of in-flight connectivity. The company also expanded its airline partner network to nine carriers with the addition of Air Premia and completed the rollout of service to five previously announced new destinations with the launch of Anchorage in May.

Jones said future capacity growth will be modest and focused on Southwest’s “points of strength,” including markets where it already has leading positions. He said the airline is not prepared to provide full-year 2027 capacity guidance but will continue to emphasize capacity discipline and profitable deployment of aircraft.

Management Emphasizes Durability of Demand Throughout the call, executives said demand and pricing remain strong. Jordan said industry recapture of higher fuel costs has been swift and pricing has remained sticky. He also said the revenue strength is not only related to fuel recovery, but reflects benefits from Southwest’s own initiatives.

Jones said the third quarter was about 65% booked at the time of the call, with yields running up 24% year over year compared with 13% for the second quarter at the same point. “There is no deceleration in the strength in the demand, no deceleration in the strength in the revenues and the fares,” he said.

Jordan said he remains optimistic about consumer demand for travel and the long-term durability of Southwest’s revenue base. He pointed to growth in managed business revenue, Rapid Rewards memberships, card acquisitions and customer engagement as evidence that the company’s changes are resonating.

Southwest also accrued more than $100 million year to date in profit sharing for employees. Jordan thanked employees and said the results show “proof in the earnings” that the company’s transformation is working.

About Southwest Airlines (NYSE:LUV)Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest's operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.

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How volatile are fuel markets this year?

Southwest Airlines hired a ship this spring to send jet fuel from Texas to California, where prices are much higher and concerns had grown about supply, Chief Financial Officer Tom Doxey told CNBC. It was a first for the Dallas airline.

"It brought like a week's supply to the West Coast at a time when when supply was most constricted ... when it was most at risk," Doxey said.

The ship, which left from Houston and went through the Panama Canal, arrived May 28 in Los Angeles and had about 12.6 million gallons aboard, Southwest said. For context, Southwest used 564 million gallons of jet fuel in the last quarter.

The West Coast is much more reliant on imports than other parts of the country. Jet fuel prices spiked and have been volatile since the U.S. and Israel struck Iran in February.

Southwest said Thursday that its fuel expenses were up nearly $900 million in the second quarter from last year.

For the shipment to California, the airline said it used a waiver of the Jones Act, a law from 1920 that requires shipments between U.S. ports to be carried on a U.S. ship. President Donald Trump waived that requirement in March as fuel prices were soaring in the weeks following the start of the Iran war and subsequent shipping snarls erupted in the Strait of Hormuz, a key channel.

Worries about supplies intensified as countries restricted exports this year, fearful of running low on fuel. Those concerns have since eased, a Southwest spokesman said.

Jet fuel is airlines' biggest expense after labor. Prices eased in late spring and early summer but rose again as tensions reignited with Iran this month.

Last week, United Airlines, which flies more internationally than any other U.S. carrier, said it is using the latest available fuel prices for its quarterly estimates because prices have been so volatile.

In its July 15 report, it said jet fuel increased $575 million, or a $1.12 hit to adjusted earnings per share, for the third quarter alone.

U.S. airlines have abandoned fuel hedges, which help them lock in costs through futures contracts, over the past decade or so as the U.S. was awash in supply, keeping a lid on prices.

This time around, carriers have scaled back their capacity growth plans, which is also helping boost fares. Airline executives this month said demand remains strong despite higher fares, which they say are likely to stick.

Read more CNBC airline newsDelta launches ‘basic business’ fares without lounge access, seat selectionRecord heat, crowds drive offseason boom in international travelDelta expects higher airfare to last, bringing 2026 profit goal in reach'Bring 'em on': Delta wants United's crown over the Pacific, tooSpirit's collapse, high fuel prices test limits of summer vacation spendingMeet the pilots flying Spirit Airlines' yellow jets to the desert

Key Takeaways Southwest Airlines' Q2 adjusted EPS rose 118.6% and beat estimates by 80.8% on record revenue.Average fares climbed 20.9% as managed business revenue hit a record and unit revenue jumped 20.1%.LUV sees Q3 EPS of 50-75 cents, with unit revenue up 17.5-19.5% and capacity down 1% to flat. Southwest Airlines Co. (LUV - Free Report) reported second-quarter 2026 adjusted earnings of 94 cents per share, up 118.6% year over year and 80.8% above the Zacks Consensus Estimate of 52 cents. Record operating revenues of $8.43 billion rose 16.4% but missed the consensus mark of $8.58 billion by 1.7%.

Results benefited from demand for enhanced products, record managed business revenues and cost discipline despite an $889 million increase in fuel expense. Adjusted unit revenues jumped 20.1%, while adjusted operating margin expanded 3.3 points to 6.7%.

LUV's Passenger Revenues Power Top-Line GrowthPassenger revenues, which accounted for 91.9% of the top line, increased 16.9% year over year to $7.75 billion. The improvement reflected higher fares and strong customer response to Southwest Airlines’ expanded commercial offerings.

Freight revenues rose 13.6% to $50 million. Other operating revenues increased 11.2% to $637 million, providing another source of growth beyond ticket sales.

Southwest Airlines Posts Stronger Revenue ProductivityRevenue passenger miles, a measure of traffic, increased 1.2% year over year to 37.35 billion. Capacity, measured in available seat miles, edged up only 0.2% to 47.09 billion, allowing demand growth to outpace supply.

The load factor improved 0.8 percentage points to 79.3%. Average passenger fare climbed 20.9% to $225.61, while passenger revenue per available seat mile advanced 16.7% to 16.45 cents. Revenue passengers carried declined 3.3% to 34.3 million.

LUV Controls Non-Fuel Costs as Fuel Expense SurgesTotal operating expenses increased 16.1% year over year to $8.15 billion. Aircraft fuel and related taxes surged 67% to $2.22 billion, representing the largest cost headwind during the quarter.

Fuel cost per gallon increased 69% to $3.92. Still, cost per available seat mile, excluding fuel, special items and profit sharing, rose a more moderate 3.4% to 12.45 cents, coming in below the company’s prior guidance.

Adjusted operating income climbed 138.8% to $585 million. Reported operating income increased 26.7% to $285 million despite the sharp rise in fuel costs.

Southwest Airlines' Commercial Initiatives Gain TractionManaged business revenues reached a quarterly record and increased 30% year over year. The performance highlighted stronger demand from corporate customers and broadened the company’s revenue mix.

Rapid Rewards enrollment rose 35%, while the loyalty program reached nearly 100 million members and posted record tier qualifiers. Acquisitions for the Chase co-branded credit card accelerated 28%, with double-digit growth in every month of the quarter.

Southwest Airlines also completed service rollouts to five new destinations and added Air Premia as its ninth airline partner. The carrier operated its first aircraft equipped with Starlink connectivity during the quarter.

LUV Generates Higher Operating Cash FlowSouthwest Airlines ended June with cash and cash equivalents of $3.79 billion, up from $3.23 billion at the end of 2025. Total liquidity was $5.3 billion, including a $1.5 billion revolving credit facility.

Net cash provided by operating activities rose to $530 million from $401 million a year earlier. Capital expenditures totaled $818 million, while proceeds from property and equipment sales reached $258 million.

The company paid $88 million in dividends during the quarter. It ended the period with $3.79 billion of long-term debt, excluding current maturities, and reported gross leverage of 2.1 times.

Southwest Airlines Issues Q3 and 2026 GuidanceFor third-quarter 2026, Southwest Airlines expects adjusted earnings of 50-75 cents per share. The Zacks Consensus Estimate is pegged at 77 cents per share. Capacity is projected to decline 1% to remain flat, while unit revenues are forecasted to increase 17.5-19.5% year over year.

Third-quarter cost per available seat mile, excluding fuel, special items and profit sharing, is expected to rise 3.5-4%. Fuel cost per gallon is projected to be between $3.70 and $3.75.

For 2026, management expects adjusted earnings of $3.25-$4.25 per share, replacing its prior expectation of at least $4. The Zacks Consensus Estimate is currently pegged at $3.23. Capacity growth is now forecasted to be roughly 1.5%, down from 2%. Net capital spending is expected near the low end of, or below, the previously announced $3-$3.5 billion range.

Currently, LUV carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q2 Performances of Other Transportation CompaniesDelta Air Lines (DAL - Free Report) reported second-quarter 2026 earnings (excluding 88 cents from non-recurring items) of $1.56 per share, beating the Zacks Consensus Estimate of $1.51. Earnings declined in double digits (% wise) from a year ago as sharply higher fuel costs pressured profitability.

Revenues rose on a year-over-year basis to $17.67 billion but missed the consensus estimate of $17.76 billion. Broad demand strength lifted adjusted total revenue per available seat mile, or TRASM, 12.4%, while premium and diversified revenue streams continued to expand.

United Airlines Holdings, Inc. (UAL - Free Report)  reported second-quarter 2026 adjusted earnings of $1.99 per share, down 48.6% year over year but above the Zacks Consensus Estimate of $1.92 by 3.7%.

Operating revenues rose 16% to $17.67 billion and were essentially in line with the $17.68-billion consensus mark. A 12.1% increase in total revenue per available seat mile, or TRASM, and broad-based gains across premium, loyalty and cargo revenues supported the top line despite sharply higher fuel costs.

J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported second-quarter 2026 earnings of $1.91 per share, up 45.8% from $1.31 a year ago. The figure beat the Zacks Consensus Estimate of $1.71 by 11.7%.

Operating revenues climbed 19.4% year over year to $3.50 billion and surpassed the consensus mark of $3.19 billion by 9.5%. Higher volumes and pricing across several businesses supported growth, led by a 10% increase in Intermodal loads.

Southwest Airlines Co (NYSE:LUV) shares fell about 5% in early trading Thursday after the airline reported stronger-than-expected second-quarter results but issued a third-quarter earnings outlook that fell below Wall Street expectations.

The company reported adjusted earnings per share of $0.94 for the second quarter, ahead of consensus estimates of $0.51.

Revenue also topped expectations, with adjusted operating revenue reaching a record $8.7 billion, up 20.3% year over year, compared with analyst estimates of $8.58 billion.

Managed business revenues reached an all-time quarterly record, rising 30% year over year. The company’s Rapid Rewards loyalty program also reached its largest size ever at nearly 100 million members, with new enrollments increasing 35% year over year and record numbers of tier qualifiers.

“Second quarter results demonstrate the earnings power of our business. We delivered results well ahead of consensus expectations despite nearly $900 million of additional fuel expense year-over-year,” Southwest CEO Bob Jordan said in a statement.

Despite the stronger-than-expected quarterly performance, investors focused on Southwest’s forward outlook.

The airline guided for third quarter adjusted earnings per share of $0.50 to $0.75, while lowering its full-year 2026 adjusted EPS outlook to a range of $3.25 to $4.25 from its previous expectation of at least $4.

For the third quarter, Southwest expects revenue per available seat mile to increase between 17.5% and 19.5% year over year, while capacity is expected to range from a 1% decline to flat growth. The company expects adjusted cost per available seat mile excluding fuel to increase 3.5% to 4.0% year over year.

Southwest attributed the updated forecast to higher fuel costs and broader uncertainty. Fuel expenses increased by $889 million year over year in the second quarter, creating a $1.17 per share headwind to adjusted earnings.

The carrier said it now expects full-year adjusted earnings per share of $3.25 to $4.25, compared with its forecast from January for at least $4.

Southwest Airlines (LUV - Free Report) came out with quarterly earnings of $0.94 per share, beating the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.43 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +80.77%. A quarter ago, it was expected that this airline would post earnings of $0.45 per share when it actually produced earnings of $0.45, delivering no surprise.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Southwest, which belongs to the Zacks Transportation - Airline industry, posted revenues of $8.43 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.68%. This compares to year-ago revenues of $7.24 billion. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Southwest shares have added about 17.8% since the beginning of the year versus the S&P 500's gain of 9.7%.

What's Next for Southwest?While Southwest has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Southwest was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.77 on $8.19 billion in revenues for the coming quarter and $3.23 on $32.75 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Airline is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Air Canada (ACDVF - Free Report) , has yet to report results for the quarter ended June 2026.

This company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of -88.4%. The consensus EPS estimate for the quarter has been revised 18.5% higher over the last 30 days to the current level.

Air Canada's revenues are expected to be $4.43 billion, up 8.8% from the year-ago quarter.

Strong year-over-year margin expansion despite fuel expense up nearly $900 million

All-time record operating and managed business revenues

Record Rapid Rewards membership and tier qualifiers

Expect full-year adjusted earnings per share1,2of $3.25 to $4.25

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) today reported second quarter 2026 financial results, marking the first full quarter with all transformational initiatives in place. Results reflected record revenue performance, significant earnings growth and margin expansion, broad demand strength, continued cost discipline, and strong Customer engagement with the Company's enhanced product offering.

"Second quarter results demonstrate the earnings power of our business. We delivered results well ahead of consensus expectations despite nearly $900 million of additional fuel expense year-over-year.

"Our business model now benefits from a broader and more diversified set of revenue and commercial levers than at any point in our history.  Momentum across managed business, Rapid Rewards, and our Chase co-branded credit card, together with continued robust demand for our enhanced product offering, reinforce the strong progress we are seeing across Southwest.

"Our focus now turns to unlocking the Company's full earnings potential by continuing to optimize our network, product offering, and pricing, while continuing to strengthen financial performance. Even in a volatile fuel environment, we delivered significant earnings growth and margin expansion in the second quarter, and are positioned to do so for the remainder of 2026," said Bob Jordan, Southwest Airlines President & Chief Executive Officer.

Highlights:

Net income of $233 million, or $0.47 diluted EPS, adjusted net income¹ of $465 million, or $0.94 adjusted EPS¹ Record operating revenues of $8.4 billion, up 16.4%, the highest in Company history; adjusted operating revenues¹ of $8.7 billion, up 20.3% Unit revenues increased 16.2%; adjusted unit revenues¹ increased 20.1%, exceeding prior guidance Operating margin of 3.4%, up 0.3 points year-over-year; adjusted operating margin¹ of 6.7%, up 3.3 points year-over-year despite an $889 million increase in nominal fuel costs Returned $88 million to Shareholders through dividends Managed business revenues reached an all-time quarterly record, increasing 30% year-over-year Strong Rapid Rewards program engagement, with new enrollments increasing 35% year-over-year and record tier qualifiers, driving the program to its largest size ever at nearly 100 million Members Chase co-branded credit card acquisitions accelerated 28% year-over-year, with double-digit growth in each month of the quarter Named #1 in Customer Satisfaction among Economy Passengers in the JD Power 2026 North America Airline Satisfaction Study for the fifth consecutive year Completed the rollout of service to all five previously announced new destinations with the addition of St. Maarten, Santa Rosa, California, and Anchorage, Alaska Welcomed Air Premia as Southwest's ninth airline partner Operated the Company's first Starlink-equipped aircraft, marking the beginning of a new era of inflight connectivity at Southwest Guidance and Outlook:
The following tables provide guidance for third quarter and full-year 2026. The Company's guidance is based on the forward fuel curve as of July 17, 2026 and assumes the current fare environment and demand trends remain broadly intact.

The Company is guiding adjusted EPS1,2 for the third quarter to be in the range of $0.50 to $0.75.
For full-year 2026, the Company is guiding adjusted EPS1,2 to be in the range of $3.25 to $4.25. This updated range replaces its prior expectation of at least $4.00.

3Q 2026 Forecast

Adjusted EPS1,2

$0.50 to $0.75

ASMs (a), year-over-year

-1% to flat

RASM (b), year-over-year                                   

17.5% to 19.5%

CASM-X (c), year-over-year1,2

3.5% to 4.0%

2026 Forecast

Adjusted EPS1,2                                                               

$3.25 to $4.25

(a) Available seat miles ("ASMs" or "capacity").

(b) Operating revenue per available seat mile ("RASM" or "unit revenues").

(c) Operating expenses per available seat mile, excluding aircraft fuel and related taxes expense, special items, and profit sharing ("CASM-X").

Revenue Results and Outlook:

Record second quarter 2026 operating revenues of $8.4 billion, up 16.4 percent year-over-year; adjusted operating revenues¹ of $8.7 billion, a 20.3 percent increase year-over-year Second quarter 2026 RASM increased 16.2 percent year-over-year, and adjusted RASM¹ increased 20.1 percent year-over-year, above prior guidance, on capacity up 0.2 percent Third quarter 2026 RASM is expected to increase between 17.5% and 19.5% year-over-year, which includes the headwind from lapping the 2025 implementation of bag fees and other initiatives Second quarter 2026 results included a $285 million adjustment for the reversal of a portion of breakage revenue recognized between 2022 and 2025 related to non-expiring flight credits issued during that same period. The accounting adjustment, which is further described in the Non-GAAP reconciliation and corresponding Non-GAAP Note, reflects a 3 percentage point increase in the Company's redemption assumption for this population of flight credits based on current redemption trends. The adjustment was treated as a special item and excluded from adjusted results. No breakage revenue related to these non-expiring flight credits was recorded during 2026.

Non-Fuel Costs and Outlook:

Second quarter 2026 operating expenses increased 16.1 percent year-over-year to $8.1 billion; operating expenses excluding special items¹ increased 16.2 percent year-over-year to $8.1 billion Second quarter 2026 operating expenses, excluding aircraft fuel and related taxes expense, special items, and profit sharing1, increased 3.6 percent year-over-year Second quarter 2026 CASM-X1 increased 3.4 percent year-over-year, below prior guidance Third quarter 2026 CASM-X1,2 is expected to increase between 3.5% and 4.0% year-over-year, which includes an expected 1.1 point headwind from the removal of six seats from the Boeing 737-700 fleet to enable extra legroom seating Fuel Costs:

Second quarter 2026 fuel cost was $3.92 per gallon, below prior assumptions of $4.10 to $4.15 per gallon. Fuel expense increased by $889 million compared to the second quarter of 2025 and represented a $1.17 headwind to adjusted EPS Third quarter 2026 fuel cost per gallon is assumed to be between $3.70 and $3.753 based on the forward curve as of July 17, 2026 Capacity, Fleet, and Capital Spending:

Second quarter 2026 capacity increased 0.2 percent year-over-year Received 13 Boeing 737-8 aircraft and retired 10 aircraft in second quarter 2026, ending the quarter with 803 aircraft (retirements included the sale of four Boeing 737-800 aircraft and one Boeing 737-700 aircraft, and the retirement of five Boeing 737-700 aircraft) Second quarter 2026 gross capital expenditures were $818 million, driven primarily by aircraft-related capital spending, as well as technology, facilities, and operational investments Expect 64 Boeing 737-8 aircraft deliveries and plan to retire approximately 60 aircraft in 2026 Entered 2026 with a disciplined capacity plan and now expect full-year growth of approximately 1.5%, versus last updated guidance of 2% Expect 2026 net capital spending4 toward the low end of, or below, the $3.0 billion to $3.5 billion range
  Liquidity and Capital Deployment:

Ended second quarter 2026 with $5.3 billion in liquidity, comprised of $3.8 billion in cash and cash equivalents and a revolving credit line of $1.5 billion Ended the quarter with gross leverage1 of 2.1x Have unencumbered aircraft and other related assets with a net book value of approximately $15.7 billion Distributed $88 million in dividends during second quarter 2026 $450 million remains outstanding under the Company's $2.0 billion share repurchase authorization Conference Call:
Southwest will discuss its second quarter 2026 results on a conference call at 10:00 a.m. Eastern Time on July 23, 2026. To listen to a live broadcast of the conference call, please go to
https://www.southwestairlinesinvestorrelations.com. 

Footnotes
1See Note Regarding Use of Non-GAAP Financial Measures for additional information on special items. In addition, information regarding special items is included in the accompanying table Reconciliation of Reported Amounts to Non-GAAP Items (also referred to as "excluding special items").
2Projections do not reflect the potential impact of special items and/or Aircraft fuel and related taxes expense, special items, and profit sharing because the Company cannot reliably predict or estimate those items or expenses or their impact to its financial statements in future periods, particularly given the unusual or infrequent nature of special items and especially considering the significant volatility of the Aircraft fuel and related taxes expense line item. Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for these projected results is not meaningful or available without unreasonable effort.
3Based on market prices as of July 17, 2026. Fuel cost per gallon includes fuel taxes and fuel hedging net premium expense of $0.05 per gallon related to terminated fuel derivative contracts.
4Net capital expenditures include the impact of aircraft sales and sale-leaseback transactions.

Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's financial and operational outlook, expectations, goals, plans, targets, and projected results of operations, including with respect to its earnings power, growth, and margin expansion, and including factors and assumptions underlying the Company's expectations and projections; (ii) the Company's initiatives, strategic priorities and focus areas, goals, and opportunities, including with respect to the Company's positioning and momentum; (iii) the Company's capacity plans and expectations; (iv) the Company's expectations with respect to fuel costs and fuel efficiency, including factors underlying the Company's expectations; (v) the Company's expectations with respect to unlocking its full earnings potential by optimizing the Company's network, product offerings, and pricing; (vi) the Company's network plans and expectations; (vii) the Company's expectations with respect to the continued demand, including with respect to engagement across managed business and loyalty programs; (viii) the Company's plans and expectations with respect to Starlink Wi-Fi; (ix) the Company's fleet plans and expectations, including with respect to its fleet order book, fleet utilization, fleet modernization, and expected fleet deliveries and retirements, and including factors and assumptions underlying the Company's plans and expectations; and (x) the Company's plans, estimates, and assumptions related to capital spending, including factors and assumptions underlying the Company's expectations and projections. These forward-looking statements are based on the Company's current estimates, intentions, beliefs, expectations, goals, strategies, and projections for the future and are not guarantees of future performance. Forward-looking statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the impact of geopolitical conflicts, fears or actual outbreaks of diseases, extreme or severe weather and natural disasters, actions of competitors (including, without limitation, pricing, scheduling, capacity, and network decisions, and consolidation and alliance activities), governmental actions, consumer perception, consumer uncertainties with respect to trade policies or government shutdowns (including the imposition of tariffs), economic conditions, banking conditions, fears or actual acts of terrorism or war, sociodemographic trends, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (ii) the Company's ability to timely and effectively implement, transition, operate, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (iii) consumer behavior and response with respect to the Company's commercial products and policies; (iv) the impact of fuel price changes, fuel price volatility, and fuel availability on the Company's business plans and results of operations; (v) the impact of governmental regulations and other governmental actions, including with respect to government shutdowns, as well as the Company's ability to obtain any required governmental approvals, on the Company's business plans, results, and operations; (vi) the Company's dependence on The Boeing Company ("Boeing") and Boeing suppliers with respect to the Company's aircraft deliveries, Boeing MAX 7 aircraft certifications, fleet and capacity plans, operations, maintenance, strategies, and goals; (vii) the Company's dependence on the Federal Aviation Administration with respect to, among other things, the certification of the Boeing MAX 7 aircraft; (viii) the Company's dependence on other third parties, in particular with respect to its technology plans, its plans and expectations related to revenue management, online travel agencies, operational reliability, fuel supply, maintenance, Global Distribution Systems, environmental sustainability, and the impact on the Company's operations and results of operations of any third-party delays or nonperformance; (ix) the Company's ability to timely and effectively prioritize its initiatives and focus areas and related expenditures; (x) the impact of labor matters on the Company's business decisions, plans, strategies, and results; (xi) the Company's ability to obtain and maintain adequate infrastructure and equipment to support its operations and initiatives; (xii) the Company's dependence on its workforce, including its ability to employ and retain sufficient numbers of qualified Employees with appropriate skills and expertise to effectively and efficiently maintain its operations and execute the Company's plans, strategies, and initiatives; (xiii) the cost and effects of the actions of activist shareholders; and (xiv) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Southwest Airlines Co.

Condensed Consolidated Statement of Income

(in millions, except per share amounts)

(unaudited)

Three months ended

Six months ended

June 30,

June 30,

2026

2025

Percent

Change

2026

2025

Percent

Change

OPERATING REVENUES:

Passenger

$    7,745

$    6,627

16.9

$  14,337

$  12,438

15.3

Freight

50

44

13.6

93

86

8.1

Other

637

573

11.2

1,252

1,148

9.1

     Total operating revenues

8,432

7,244

16.4

15,682

13,672

14.7

OPERATING EXPENSES:

Salaries, wages, and benefits

3,499

3,262

7.3

6,797

6,364

6.8

Aircraft fuel and related taxes

2,215

1,326

67.0

3,571

2,575

38.7

Maintenance materials and repairs

294

331

(11.2)

552

623

(11.4)

Landing fees and airport rentals

636

567

12.2

1,208

1,090

10.8

Depreciation and amortization

402

400

0.5

800

795

0.6

Other operating expenses

1,101

1,133

(2.8)

2,139

2,223

(3.8)

     Total operating expenses

8,147

7,019

16.1

15,067

13,670

10.2

OPERATING INCOME

285

225

26.7

615

2

n.m.

NON-OPERATING EXPENSES (INCOME):

Interest expense

64

39

64.1

118

85

38.8

Capitalized interest

(12)

(13)

(7.7)

(25)

(24)

4.2

Interest income

(33)

(54)

(38.9)

(57)

(138)

(58.7)

Other (gains) losses, net

(40)

(27)

48.1

(13)

(9)

44.4

     Total non-operating expenses (income)

(21)

(55)

(61.8)

23

(86)

n.m.

INCOME BEFORE INCOME TAXES

306

280

9.3

592

88

n.m.

PROVISION FOR INCOME TAXES

73

67

9.0

132

24

n.m.

NET INCOME

$      233

$       213

9.4

$      460

$       64

n.m.

NET INCOME PER SHARE:

Basic

$      0.48

$      0.40

20.0

$     0.93

$     0.11

n.m.

Diluted

$      0.47

$      0.39

20.5

$     0.92

$     0.11

n.m.

WEIGHTED AVERAGE SHARES OUTSTANDING:               

Basic

489

538

(9.1)

494

561

(11.9)

Diluted

493

541

(8.9)

498

564

(11.7)

Southwest Airlines Co.

Reconciliation of Reported Amounts to Non-GAAP Financial Measures (excluding special items)

(See Note Regarding Use of Non-GAAP Financial Measures)

(in millions, except per share and per ASM amounts) (unaudited)

Three months ended

Six months ended

June 30,

Percent

June 30,

Percent

2026

2025

Change

2026

2025

Change

Operating revenues, as reported

$    8,432

$    7,244

$  15,682

$  13,672

(a)

Add: Breakage revenue adjustment

285

—

285

—

Operating revenues, excluding special items

$    8,717

$    7,244

20.3

$  15,967

$  13,672

16.8

Aircraft fuel and related taxes, unhedged

$    2,186

$    1,290

$   3,513

$   2,502

(b)

Add: Premium cost of fuel contracts designated as hedges

29

36

58

73

Aircraft fuel and related taxes, as reported

$    2,215

$    1,326

67.0

$   3,571

$   2,575

38.7

Total operating expenses, as reported

$    8,147

$    7,019

$  15,067

$  13,670

Deduct: Impairment of long-lived assets

—

(8)

—

(8)

Deduct: Litigation accruals

—

—

—

(19)

Deduct: Transformation costs

—

(12)

—

(26)

(c)

Deduct: Severance and related costs

(15)

—

(15)

(62)

Total operating expenses, excluding special items

$    8,132

$    6,999

16.2

$  15,052

$  13,555

11.0

Deduct: Aircraft fuel and related taxes expense, as reported

(2,215)

(1,326)

(3,571)

(2,575)

Operating expenses, excluding Aircraft fuel and related taxes expense and special items

$    5,917

$    5,673

4.3

$  11,481

$  10,980

4.6

Deduct: Profit-sharing expense

(53)

(14)

(103)

(14)

Operating expenses, excluding Aircraft fuel and related taxes expense, special items, and profit sharing

$    5,864

$    5,659

3.6

$  11,378

$  10,966

3.8

Operating income, as reported

$      285

$      225

$     615

$        2

(a)

Add: Breakage revenue adjustment

285

—

285

—

Add: Impairment of long-lived assets

—

8

—

8

Add: Litigation accruals

—

—

—

19

Add: Transformation costs

—

12

—

26

(c)

Add: Severance and related costs

15

—

15

62

Operating income, excluding special items

$      585

$      245

138.8

$     915

$     117

682.1

Total operating revenues, as reported

$    8,432

$    7,244

$  15,682

$  13,672

Operating margin, as reported

3.4 %

3.1 %

0.3 pts.

3.9 %

— %

3.9 pts.

Add: Impact of special items

3.3 %

0.3 %

1.8 %

0.9 %

Operating margin, excluding special items

6.7 %

3.4 %

3.3 pts.

5.7 %

0.9 %

4.8 pts.

Income before income taxes, as reported

$      306

$      280

$     592

$       88

(a)

Add: Breakage revenue adjustment

285

—

285

—

Add: Litigation accruals

—

—

—

19

Add: Transformation costs

—

12

—

26

(c)

Add: Severance and related costs

15

—

15

62

Add: Impairment of long-lived assets

—

8

—

8

Income before income taxes, excluding special items

$      606

$      300

102.0

$     892

$     203

339.4

Provision for income taxes, as reported

$       73

$        67

$     132

$       24

(d)

Add: Net income tax impact of fuel and special items

68

3

69

26

Provision for income taxes, net, excluding special items

$      141

$        70

101.4

$     201

$       50

302.0

Net income, as reported

$      233

$      213

$     460

$       64

(a)

Add: Breakage revenue adjustment

285

—

285

—

Add: Litigation accruals

—

—

—

19

Add: Transformation costs

—

12

—

26

(c)

Add: Severance and related costs

15

—

15

62

Add: Impairment of long-lived assets

—

8

—

8

(d)

Deduct: Net income tax impact of special items

(68)

(3)

(69)

(26)

Net income, excluding special items

$      465

$      230

102.2

$     691

$     153

351.6

Total operating revenues, as reported

$    8,432

$    7,244

$  15,682

$  13,672

Net margin, as reported

2.8 %

2.9 %

(0.1) pts.

2.9 %

0.5 %

2.4 pts.

Add: Impact of special items

3.3 %

0.3 %

1.8 %

0.8 %

(d)

Deduct: Net income tax impact of special items

(0.8) %

— %

(0.4) %

(0.2) %

Net margin, excluding special items

5.3 %

3.2 %

2.1 pts.

4.3 %

1.1 %

3.2 pts.

Net income per share, diluted, as reported

$      0.47

$      0.39

$     0.92

$     0.11

Add: Impact of special items

0.61

0.05

0.61

0.21

(d)

Deduct: Net income tax impact of special items

(0.14)

(0.01)

(0.14)

(0.05)

Net income per share, diluted, excluding special items

$      0.94

$      0.43

118.6

$     1.39

$     0.27

414.8

Operating revenues per ASM (cents), as reported

      17.91 ¢

      15.41 ¢

     17.59 ¢

     15.46 ¢

Add: Impact of special items

0.60

—

0.32

—

Operating revenues per ASM, excluding special items (cents)

      18.51 ¢

      15.41 ¢

20.1

     17.91 ¢

     15.46 ¢

15.8

Operating expenses per ASM (cents)

      17.30 ¢

      14.94 ¢

     16.90 ¢

     15.46 ¢

Deduct: Impact of special items

(0.04)

(0.04)

(0.02)

(0.13)

Deduct: Aircraft fuel and related taxes expense divided by ASMs

(4.70)

(2.83)

(4.00)

(2.91)

Deduct: Profit-sharing expense divided by ASMs

(0.11)

(0.03)

(0.12)

(0.02)

Operating expenses per ASM, excluding Aircraft fuel and related taxes expense, special items, and profit sharing (cents)

      12.45 ¢

      12.04 ¢

3.4

     12.76 ¢

     12.40 ¢

2.9

(a) Represents a change in breakage revenue estimate related to non-expiring flight credits the Company issued to Passengers between July 2022 and December 2025. Due to higher-than-projected Customer redemptions of these non-expiring flight credits, along with updated projections of future redemptions, the Company has revised its estimates with regards to the remaining non-expiring flight credits that remain available for redemption.

(b) Includes amounts reclassified from Accumulated other comprehensive income associated with hedges previously terminated.

(c) Represents Employee severance and other related payments resulting from corporate workforce reductions.

(d) Tax amounts for each individual special item are calculated at the Company's effective rate for the applicable period and totaled in this line item.

Southwest Airlines Co.

Comparative Consolidated Operating Statistics

(unaudited)

Relevant comparative operating statistics for the three and six months ended June 30, 2026 and 2025 are included below. The Company provides these operating

statistics because they are commonly used in the airline industry and, as such, allow readers to compare the Company's performance against its results for the

prior year period, as well as against the performance of the Company's peers. 

Three months ended

Six months ended

June 30,

Percent

June 30,

Percent

2026

2025

Change

2026

2025

Change

Revenue passengers carried (000s)

34,331

35,507

(3.3)

63,506

65,497

(3.0)

Enplaned passengers (000s)

44,518

44,385

0.3

81,795

81,524

0.3

Revenue passenger miles (RPMs) (in millions) (a)

37,346

36,885

1.2

68,497

67,513

1.5

Available seat miles (ASMs) (in millions) (b)

47,093

46,996

0.2

89,142

88,427

0.8

Load factor (c)

79.3 %

78.5 %

0.8 pts.

76.8 %

76.3 %

0.5 pts.

Average length of passenger haul (miles)

1,088

1,039

4.7

1,079

1,031

4.7

Average aircraft stage length (miles)

784

786

(0.3)

781

779

0.3

Trips flown

367,740

367,952

(0.1)

698,110

699,838

(0.2)

Seats flown (000s) (d)

59,009

59,265

(0.4)

112,039

112,502

(0.4)

Seats per trip (e)

160.5

161.1

(0.4)

160.5

160.8

(0.2)

Average passenger fare

$   225.61

$   186.65

20.9

$    225.76

$    189.90

18.9

Passenger revenue yield per RPM (cents) (f)

20.74

17.97

15.4

20.93

18.42

13.6

RASM (cents) (g)

17.91

15.41

16.2

17.59

15.46

13.8

RASM, excluding special items (cents)

18.51

15.41

20.1

17.91

15.46

15.8

PRASM (cents) (h)

16.45

14.10

16.7

16.08

14.07

14.3

CASM (cents) (i)

17.30

14.94

15.8

16.90

15.46

9.3

CASM, excluding fuel (cents)

12.60

12.11

4.0

12.90

12.55

2.8

CASM, excluding special items (cents)

17.27

14.89

16.0

16.89

15.33

10.2

CASM, excluding fuel and special items (cents)

12.56

12.07

4.1

12.88

12.42

3.7

CASM, excluding fuel, special items, and profit sharing (cents)               

12.45

12.04

3.4

12.76

12.40

2.9

Fuel costs per gallon, including fuel tax (unhedged)

$     3.87

$      2.26

71.2

$       3.31

$       2.33

42.1

Fuel costs per gallon, including fuel tax

$     3.92

$      2.32

69.0

$       3.37

$       2.40

40.4

Fuel consumed, in gallons (millions)

564

570

(1.1)

1,059

1,071

(1.1)

Active fulltime equivalent Employees

73,456

72,242

1.7

73,456

72,242

1.7

Aircraft at end of period

803

810

(0.9)

803

810

(0.9)

(a) A revenue passenger mile is one paying passenger flown one mile. Also referred to as "traffic," which is a measure of demand for a given period.

(b) An available seat mile is one seat (empty or full) flown one mile. Also referred to as "capacity," which is a measure of supply or the space available to carry passengers in a given period.

(c) Revenue passenger miles divided by available seat miles.

(d) Seats flown is calculated using total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period.

(e) Seats per trip is calculated by dividing seats flown by trips flown.

(f) Calculated as passenger revenue divided by revenue passenger miles. Also referred to as "yield," this is the average cost paid by a paying passenger to fly one mile, which is a measure of revenue production and fares.

(g) RASM (unit revenue) - Operating revenue yield per ASM, calculated as operating revenue divided by available seat miles. Also referred to as "operating unit revenues," this is a measure of operating revenue production based on the total available seat miles flown during a particular period.

(h) PRASM (Passenger unit revenue) - Passenger revenue yield per ASM, calculated as passenger revenue divided by available seat miles. Also referred to as "passenger unit revenues," this is a measure of passenger revenue production based on the total available seat miles flown during a particular period.

(i) CASM (unit costs) - Operating expenses per ASM, calculated as operating expenses divided by available seat miles. Also referred to as "unit costs" or "cost per available seat mile," this is the average cost to fly an aircraft seat (empty or full) one mile, which is a measure of cost efficiency.

Southwest Airlines Co.

Condensed Consolidated Balance Sheet

(in millions)

(unaudited)

June 30, 2026

December 31, 2025

ASSETS

Current assets:

     Cash and cash equivalents

$                  3,791

$                  3,231

     Accounts and other receivables

1,218

1,149

     Inventories of parts and supplies, at cost

917

775

     Prepaid expenses and other current assets

556

490

          Total current assets

6,482

5,645

Property and equipment, at cost:

     Flight equipment

26,198

26,293

     Ground property and equipment

9,485

9,163

     Deposits on flight equipment purchase contracts

616

401

     Assets constructed for others

88

88

36,387

35,945

     Less allowance for depreciation and amortization                    

15,745

15,700

20,642

20,245

Goodwill

970

970

Operating lease right-of-use assets

953

1,089

Other assets

1,075

1,112

$                30,122

$                 29,061

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable

$                  2,072

$                  1,991

     Accrued liabilities

2,247

2,349

     Current operating lease liabilities

283

312

     Air traffic liability

6,510

5,945

     Current maturities of long-term debt

2,156

324

          Total current liabilities

13,268

10,921

Long-term debt less current maturities

3,790

4,577

Air traffic liability - noncurrent

1,674

1,219

Deferred income taxes

2,421

2,289

Noncurrent operating lease liabilities

660

768

Other noncurrent liabilities

1,227

1,306

Stockholders' equity:

     Common stock

888

888

     Capital in excess of par value

4,294

4,322

     Retained earnings

16,672

16,388

     Accumulated other comprehensive income (loss)

22

(24)

     Treasury stock, at cost

(14,794)

(13,593)

          Total stockholders' equity

7,082

7,981

$                30,122

$                 29,061

Southwest Airlines Co.

Condensed Consolidated Statement of Cash Flows

(in millions) (unaudited)

Three months ended

 June 30,

Six months ended

 June 30,

2026

2025

2026

2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$       233

$       213

$       460

$        64

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

402

400

800

795

Impairment of long-lived assets

—

8

—

8

Deferred income taxes

60

66

117

23

Gain on sale-leaseback transactions

—

—

—

(3)

Changes in certain assets and liabilities:

Accounts and other receivables

37

90

(56)

146

Other assets

(54)

212

(115)

357

Accounts payable and accrued liabilities

23

(95)

(56)

(220)

Air traffic liability

(65)

(606)

1,021

55

Other liabilities

(53)

28

(130)

(35)

Cash collateral provided to derivative counterparties

—

—

—

(22)

Other, net

(53)

85

(94)

93

Net cash provided by operating activities

530

401

1,947

1,261

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(818)

(660)

(1,448)

(1,187)

Proceeds from sale of property and equipment

258

25

450

51

Proceeds from sale-leaseback transactions

—

—

—

24

Purchases of short-term investments

—

(319)

—

(370)

Proceeds from sales of short-term and other investments

—

72

—

1,226

Other, net

—

—

(6)

(3)

Net cash used in investing activities

(560)

(882)

(1,004)

(259)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt

1,000

—

1,500

—

Proceeds from Employee stock plans

15

15

31

32

Repurchase of common stock

—

(1,500)

(1,250)

(2,250)

Payments of long-term debt and finance lease obligations

(431)

(2,592)

(437)

(2,598)

Payments of cash dividends

(88)

(103)

(181)

(210)

Other, net

(3)

2

(46)

(10)

Net cash provided by (used in) financing activities

493

(4,178)

(383)

(5,036)

NET CHANGE IN CASH AND CASH EQUIVALENTS

463

(4,659)

560

(4,034)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

3,328

8,134

3,231

7,509

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$     3,791

$     3,475

$     3,791

$     3,475

NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES
The Company's unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP. These GAAP financial statements include (i) unrealized noncash reclassifications, as a result of accounting requirements and elections previously made under accounting pronouncements relating to derivative instruments and hedging and (ii) other charges and benefits the Company considers unusual and/or infrequent in nature and thus may make comparisons to its prior or future performance difficult.

Accordingly, the Company also provides financial information in this filing that was not prepared in accordance with GAAP and should not be considered as a substitute for the information prepared in accordance with GAAP. The Company provides supplemental non-GAAP financial information (also referred to as "excluding special items"). Management believes special items can distort the trends associated with the Company's ongoing performance. Therefore, management utilizes non-GAAP financial measures to evaluate the Company's financial performance, anticipate future operating results, and assess trends without the impact of items that can vary significantly from period to period. The following measures are often provided, excluding special items, and are utilized by the Company's management, analysts, and investors to enhance comparability of year-over-year results, as well as to industry trends: Operating revenues, non-GAAP; Total operating expenses, non-GAAP; Operating expenses, non-GAAP excluding Aircraft fuel and related taxes expense; Operating expenses, non-GAAP excluding Aircraft fuel and related taxes expense and profit sharing; Operating income, non-GAAP; Adjusted Operating income, non-GAAP; Income before income taxes, non-GAAP; Provision for income taxes, net, non-GAAP; Net income, non-GAAP; Net income per share, diluted, non-GAAP; Operating revenues per ASM, non-GAAP (cents); Operating expenses per ASM, non-GAAP, excluding Aircraft fuel and related taxes expense and profit sharing (cents); Return on invested capital, non-GAAP; adjusted operating margin; adjusted net margin; and gross leverage.

For the periods presented, special items include:

Charges associated with tentative litigation settlements regarding paid short-term military leave to certain Employees; Expenses associated with professional advisory fees related to the Company's implementation of its comprehensive transformational plan; Charges associated with Employee severance and other related payments resulting from corporate workforce reductions; Reversal of breakage revenue recorded in prior years related to a portion of non-expiring flight credits issued to Customers between July 2022 and December 2025 that have either been redeemed or are expected to be redeemed in future periods; Non-cash impairment charges to remove certain assets from the unaudited Condensed Consolidated Balance Sheet that are no longer in use; Expenses associated with incremental professional advisory fees related to activist investor activities, which were not budgeted by the Company or associated with the ongoing operation of the airline; Incremental expense associated with a voluntary separation program that allowed eligible Employees the opportunity to voluntarily separate from the Company in exchange for severance, medical/dental coverage for a specified period of time, and travel privileges based on years of service; and A charge associated with a settlement reached with the Department of Transportation ("DOT") as a result of the Company's December 2022 operational disruption. The Company has also provided its calculation of return on invested capital, which is a measure of financial performance used by management to evaluate its investment returns on capital. Return on invested capital is not a substitute for financial results as reported in accordance with GAAP and should not be utilized in place of such GAAP results. Return on invested capital is not a measure defined by GAAP. It is calculated by the Company, in part, using non-GAAP financial measures, which include charges or benefits that are deemed "special items." As noted above, the Company believes "special items" make it difficult to compare to prior periods, anticipated future periods, or industry trends since these items cannot be reliably predicted or estimated. The Company believes non-GAAP return on invested capital is a meaningful measure because it quantifies the Company's effectiveness in generating returns relative to the capital it has invested in its business. Although return on invested capital is commonly used as a measure of capital efficiency, definitions of return on invested capital differ; therefore, the Company is providing an explanation of its calculation for non-GAAP return on invested capital in the accompanying reconciliation in order to allow investors to compare and contrast its calculation to the calculations provided by other companies.

Southwest Airlines Co.

Non-GAAP Return on Invested Capital (ROIC)

(in millions)

(unaudited)

Twelve months ended

Twelve months ended

June 30, 2026

June 30, 2025

Operating income, as reported

$                   1,041

$                     318

Breakage revenue adjustment

285

116

Severance and related costs

15

62

Voluntary Employee programs

—

5

Net impact from fuel contracts

—

(43)

Professional advisory fees

—

30

Transformation costs

7

30

DOT settlement

(11)

—

Litigation accruals

—

19

Impairments

—

8

Operating income, non-GAAP

$                   1,337

$                     545

Net adjustment for aircraft leases (a)

211

182

Adjusted operating income, non-GAAP (A)

$                   1,548

$                     727

Non-GAAP tax rate (B)

22.4 %

(d)

22.6 %

(e)

Net operating profit after-tax, NOPAT (A* (1-B) = C)                    

$                   1,201

$                     563

Debt, including finance leases (b)

$                   4,888

$                   6,699

Equity (b)

7,543

9,718

Net present value of aircraft operating leases (b)

857

967

Average invested capital

$                  13,288

$                  17,384

Equity adjustment for hedge accounting (c)

8

31

Adjusted average invested capital (D)

$                  13,296

$                  17,415

Non-GAAP ROIC, pre-tax (A/D)

11.6 %

4.2 %

Non-GAAP ROIC, after-tax (C/D)

9.0 %

3.2 %

(a) Net adjustment to reflect all aircraft in fleet as owned (i.e., the impact of eliminating aircraft rent expense and replacing with estimated depreciation expense for those same aircraft). The Company makes this adjustment to enhance comparability to other entities that have different capital structures by utilizing alternative financing decisions.

(b) Calculated as an average of the five most recent quarter end balances or remaining obligations. The Net present value of aircraft operating leases represents the assumption that all aircraft in the Company's fleet are owned, as it reflects the remaining contractual commitments discounted at the Company's estimated incremental borrowing rate as of the time each individual lease was signed.

(c) The Equity adjustment in the denominator adjusts for the cumulative impacts, in Accumulated other comprehensive income and Retained earnings, of gains and/or losses that will settle in future periods, including those associated with the Company's terminated fuel hedges. The current period impact of these gains and/or losses is reflected in the Net impact from fuel contracts in the numerator.
(d) The GAAP twelve month rolling tax rate as of June 30, 2026, was 21.5 percent, and the Non-GAAP twelve month rolling tax rate was 22.4 percent. See Note Regarding Use of Non-GAAP Financial Measures for additional information.

(e) The GAAP twelve month rolling tax rate as of June 30, 2025, was 22.3 percent, and the Non-GAAP twelve month rolling tax rate was 22.6 percent. See Note Regarding Use of Non-GAAP Financial Measures for additional information.

The Company has also provided gross leverage, which is calculated as adjusted debt divided by trailing twelve month adjusted EBITDAR. Leverage, adjusted debt, and adjusted EBITDAR are non-GAAP measures of financial performance. Management believes these supplemental measures can provide a more accurate view of the Company's leverage and risk, since they consider the Company's debt and debt-like obligation profile. Leverage ratios are widely used by investors, analysts, and rating agencies in the valuation, comparison, rating, and investment recommendations of companies. Although adjusted debt, adjusted EBITDAR, and leverage ratios are commonly-used financial measures, definitions of each differ; therefore, the Company is providing an explanation of its calculations for non-GAAP adjusted debt and adjusted EBITDAR in the accompanying reconciliation below in order to allow investors to compare and contrast its calculations to the calculations provided by other companies.

Southwest Airlines Co.

Non-GAAP Gross Leverage

(in millions) (unaudited)

June 30, 2026

Current maturities of long-term debt, as reported

$                        2,156

Long-term debt less current maturities, as reported

3,790

Total debt, including finance leases (A)

5,946

Add: Current operating lease liabilities, as reported

283

Add: Noncurrent operating lease liabilities, as reported

660

Adjusted debt (B)

$                        6,889

Twelve Months Ended

June 30, 2026

Net income, as reported (C)

$                          837

Interest expense (income), net of capitalized interest, as reported

22

Income tax expense (benefit), as reported

229

Non-operating other (gains) losses, net, as reported

(47)

Operating income, as reported

1,041

Impact of special items

296

Operating income, non-GAAP

1,337

Depreciation and amortization

1,565

Fixed portion of operating lease expense

350

Adjusted EBITDAR (D)

$                        3,252

Total debt to Net income (A/C)

7.1x

Adjusted debt to adjusted EBITDAR (B/D)

2.1x

SOURCE Southwest Airlines Co.

Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider United Parcel Service?Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. United Parcel Service (UPS - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.66 a share, just seven days from its upcoming earnings release on July 28, 2026.

By taking the percentage difference between the $1.66 Most Accurate Estimate and the $1.65 Zacks Consensus Estimate, United Parcel Service has an Earnings ESP of +1.06%. Investors should also know that UPS is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

UPS is one of just a large database of Transportation stocks with positive ESPs. Another solid-looking stock is Southwest Airlines (LUV - Free Report) .

Southwest Airlines, which is readying to report earnings on July 22, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $0.54 a share, and LUV is one day out from its next earnings report.

Southwest Airlines' Earnings ESP figure currently stands at +4.60% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.52.

UPS and LUV's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Posted by Defense World Staff on Jul 20th, 2026

Bank of New York Mellon Corp lifted its holdings in shares of Southwest Airlines Co. (NYSE:LUV – Free Report) by 4.7% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm owned 3,924,407 shares of the airline’s stock after buying an additional 176,742 shares during the period. Bank of New York Mellon Corp owned approximately 0.80% of Southwest Airlines worth $147,440,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also added to or reduced their stakes in LUV. Norges Bank bought a new stake in Southwest Airlines during the 4th quarter valued at $172,038,000. SG Americas Securities LLC increased its holdings in shares of Southwest Airlines by 2,468.4% during the fourth quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock valued at $155,085,000 after purchasing an additional 3,606,255 shares during the period. Massachusetts Financial Services Co. MA acquired a new position in shares of Southwest Airlines during the fourth quarter valued at $143,450,000. Franklin Resources Inc. raised its stake in shares of Southwest Airlines by 7.0% during the fourth quarter. Franklin Resources Inc. now owns 40,200,530 shares of the airline’s stock valued at $1,661,488,000 after purchasing an additional 2,626,853 shares in the last quarter. Finally, Mizuho Markets Americas LLC bought a new stake in shares of Southwest Airlines during the fourth quarter valued at about $55,320,000. 80.82% of the stock is owned by institutional investors.

Wall Street Analyst Weigh In LUV has been the subject of a number of recent analyst reports. JPMorgan Chase & Co. decreased their target price on shares of Southwest Airlines from $58.00 to $56.00 in a research report on Friday, March 27th. Citigroup boosted their price target on shares of Southwest Airlines from $44.00 to $55.00 and gave the stock a “neutral” rating in a research report on Friday, June 26th. Zacks Research raised shares of Southwest Airlines from a “strong sell” rating to a “hold” rating in a research note on Thursday, June 25th. BMO Capital Markets increased their price objective on shares of Southwest Airlines from $45.00 to $58.50 and gave the company an “outperform” rating in a report on Thursday, July 2nd. Finally, Weiss Ratings cut shares of Southwest Airlines from a “hold (c+)” rating to a “hold (c)” rating in a report on Monday, June 8th. Nine analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have issued a Sell rating to the company. According to MarketBeat.com, Southwest Airlines has a consensus rating of “Hold” and an average target price of $49.58.

View Our Latest Report on Southwest Airlines

Southwest Airlines Price Performance Shares of NYSE LUV opened at $48.09 on Monday. Southwest Airlines Co. has a twelve month low of $28.98 and a twelve month high of $55.11. The company has a current ratio of 0.48, a quick ratio of 0.41 and a debt-to-equity ratio of 0.66. The company has a market capitalization of $23.50 billion, a price-to-earnings ratio of 31.02, a PEG ratio of 0.45 and a beta of 1.12. The firm has a 50-day moving average of $45.26 and a two-hundred day moving average of $44.12.

Southwest Airlines (NYSE:LUV – Get Free Report) last announced its quarterly earnings data on Wednesday, April 22nd. The airline reported $0.45 earnings per share (EPS) for the quarter, hitting the consensus estimate of $0.45. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.66%. The company had revenue of $7.25 billion for the quarter, compared to analysts’ expectations of $8.46 billion. During the same quarter in the previous year, the company posted ($0.13) EPS. The business’s revenue was up 12.8% compared to the same quarter last year. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. As a group, analysts expect that Southwest Airlines Co. will post 3.23 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend The firm also recently announced a quarterly dividend, which was paid on Thursday, July 2nd. Investors of record on Thursday, June 11th were issued a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a yield of 1.5%. The ex-dividend date was Thursday, June 11th. Southwest Airlines’s dividend payout ratio (DPR) is presently 46.45%.

Southwest Airlines Profile (Free Report)

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest’s operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.

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Southwest Airlines (LUV - Free Report) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The earnings report, which is expected to be released on July 22, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis airline is expected to post quarterly earnings of $0.52 per share in its upcoming report, which represents a year-over-year change of +20.9%.

Revenues are expected to be $8.58 billion, up 18.4% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 28.26% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Southwest?For Southwest, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.21%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Southwest will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Southwest would post earnings of $0.45 per share when it actually produced earnings of $0.45, delivering no surprise.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Southwest doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected ResultsAnother stock from the Zacks Transportation - Airline industry, Alaska Air Group (ALK - Free Report) , is soon expected to post loss of $0.97 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of -154.5%. Revenues for the quarter are expected to be $4.09 billion, up 10.6% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for Alaska Air has been revised 76.1% up to the current level. Nevertheless, the company now has an Earnings ESP of -0.88%, reflecting a lower Most Accurate Estimate.

This Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Alaska Air will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

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Stock to Watch: Southwest Airlines (LUV - Free Report) Based in Dallas, TX, Southwest Airlines is a passenger airline that provides scheduled air transportation in the United States and 'ten near-international' markets. The company was incorporated in Texas in 1967 and commenced operations in 1971 with three Boeing 737 jets serving the cities of Dallas, Houston and San Antonio.

LUV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 15.11; value investors should take notice.

Seven analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.33 to $3.17 per share. LUV also boasts an average earnings surprise of +247%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, LUV should be on investors' short list.

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Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Southwest Airlines (LUV - Free Report) Based in Dallas, TX, Southwest Airlines is a passenger airline that provides scheduled air transportation in the United States and 'ten near-international' markets. The company was incorporated in Texas in 1967 and commenced operations in 1971 with three Boeing 737 jets serving the cities of Dallas, Houston and San Antonio.

LUV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Transportation stock. LUV has a Momentum Style Score of A, and shares are up 23.9% over the past four weeks.

For fiscal 2026, three analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.25 to $3.02 per share. LUV boasts an average earnings surprise of +247%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, LUV should be on investors' short list.

HomeStock IdeasLong IdeasIndustrial 

SummarySouthwest Airlines is initiated with a "Buy" rating, citing a turnaround, strong forward earnings trends, and favorable macro tailwinds.LUV expects EPS to more than triple to $2.96 this year, with out-year earnings potentially exceeding $4.50 and normalized growth by FY 2028.Valuation appears attractive; applying a low-teens P/E to $4.50 normalized EPS suggests shares could reach $60, supported by strong travel trends and lower energy costs.Technical momentum is bullish, with the 200-day moving average rising and price support near $45; resistance is seen at $55, with potential for mid-$60s within 12 months. Getty Images

Airline stocks have sprung back to life as tensions in the Middle East have eased. An outright crash in WTI and Brent crude oil is a clear tailwind, and we’ll find out soon how the world’s biggest airlines performed heading into

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +24% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Southwest Airlines (LUV - Free Report) Based in Dallas, TX, Southwest Airlines is a passenger airline that provides scheduled air transportation in the United States and 'ten near-international' markets. The company was incorporated in Texas in 1967 and commenced operations in 1971 with three Boeing 737 jets serving the cities of Dallas, Houston and San Antonio.

LUV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 17.38; value investors should take notice.

One analyst revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.01 to $2.93 per share. LUV also boasts an average earnings surprise of +247%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, LUV should be on investors' short list.

Southwest to transition to a cloud-based, AI-enabled architecture on AWS by 2028

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) is partnering with Amazon Web Services (AWS) as its preferred cloud provider to modernize its technology foundation and evolve how the airline operates, builds, and is able to serve its Customers. As part of this partnership, Southwest will transition from a largely on-premises environment to a cloud-based, AI- and agent-enabled architecture on AWS by 2028—laying the foundation to operate with greater speed, flexibility, and reliability to support the business.

Technology powers nearly every part of the airline—from selling seats, to running daily operations, to supporting more than 70,000 Employees. As the airline continues to evolve its business model and Customer experience, it is also accelerating efforts to simplify its technology environment and improve how systems work together at scale.

"Southwest has always evolved our business with a focus on improving performance, efficiency, and reliability—and applying that same mindset to our technology with AWS is a core part of that strategy," said Lauren Woods, Executive Vice President & Chief Information Officer at Southwest Airlines, "From Customer experience, to operations, to how we build the systems behind it—all of it is coming together in a way that helps our Teams move faster, make better decisions, and deliver for our Customers."

Building a cloud-based airline by 2028

Southwest is continuing to modernize its footprint on AWS, targeting a fully cloud-based environment by 2028 while expanding how it uses AI and agent-based capabilities across the business by adopting new tools like Amazon Quick.

"Southwest Airlines is using AI to deliver on its commitment to being a customer-obsessed airline. By deploying AI agents across customer experience, operations, and software development, they're accelerating innovation for 134 million travelers—and proving that pioneering ambition paired with AWS's agentic AI capabilities delivers real, measurable results at scale," said Swami Sivasubramanian, Vice President, Agentic AI at AWS.

Accelerating modernization with Kiro

Southwest is using Kiro, AWS's agentic coding service, to modernize one of its largest and most critical Customer-facing platforms—Southwest.com.

Historically, the platform has operated a large footprint of on-premises systems with long modernization timelines. By leveraging Kiro to refactor legacy code, Southwest has accelerated that effort significantly. Kiro is now used by more than 2,700 developers to build features, help automate testing, and to generate the infrastructure in the cloud.

This work is creating a foundation that is easier to evolve, scale, and support—helping Southwest move faster and automate tasks in minutes that used to take hours.

Reimagining how software gets built with AI-Driven Development Life Cycle

Beyond individual tools, Southwest is also transforming how software is built across the organization.

Using an intelligent software development workflow built on AWS capabilities like AI-Driven Development Lifecycle (AIDLC)—Southwest is adopting a more agent-driven way of working. In this model, AI agents help move development forward, while engineering teams remain responsible for guiding, validating, and owning the outcomes.

About Southwest Airlines 

Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 120 airports across 12 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline1. By empowering its more than 73,0002 People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 134 million Customers carried in 2025. Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship.

About Amazon Web Services (AWS)

Amazon Web Services (AWS) is guided by customer obsession, pace of innovation, commitment to operational excellence, and long-term thinking. By democratizing technology for nearly two decades and making cloud computing and generative AI accessible to organizations of every size and industry, AWS has built one of the fastest-growing enterprise technology businesses in history. Millions of customers trust AWS to accelerate innovation, transform their businesses, and shape the future. With the most comprehensive AI capabilities and global infrastructure footprint, AWS empowers builders to turn big ideas into reality. Learn more at aws.amazon.com and follow @AWSNewsroom.

1. Based on U.S. Dept. of Transportation quarterly Airline Origin & Destination Survey as of Q4 2025

2. Fulltime-equivalent active Employees as of March 31, 2026.

SOURCE Southwest Airlines Co.

Band returns to the skies performing hit song "Hey There Delilah" in a nostalgic nod to the program's beginnings during the airline's 55th year of service

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) is celebrating its signature Live at 35® program that brings live pop-up performances to Customers onboard flights at 35,000 feet. To mark the occasion, the Plain White T's took to the skies and surprised Southwest® Customers by singing their hit song, "Hey There Delilah," which continues to draw crowds and resurface on TikTok with billions of plays. The Plain White T's were one of the first artists to perform onboard a Southwest flight when the airline launched the program 15 years ago.

"At Southwest, we're proud to deliver our signature Hospitality in unexpected ways with surprise performances at 35,000 feet," said Sabrina Callahan, Senior Vice President and Chief Digital and Marketing Officer. "Through Live at 35 and the personality of our incredible Crew, we've created moments that turn flights into lasting memories from the minute our Customers step onboard."

Past Live at 35 performances have featured independent artists and mainstream musicians, and the airline plans to dial up the experiences in the coming months, with more artists performing at new heights. The Plain White T's recent performance included Tom Higgenson as lead singer and guitarist, accompanied by Tim Lopez on lead vocals and guitar, Mike Retondo on backing vocals and bass, and De'Mar Hamilton on percussion.

"We've played a lot of venues over time, and I speak for all of us when I say there is nothing like hearing a plane full of people singing along with your music at 35,000 feet," said Tom Higgenson of the Plain White T's. "We had the opportunity to perform inflight with Southwest over a decade ago, and while that can feel like it was a million years ago, not much has changed. We loved making history with Southwest and their welcoming team."

Southwest Airlines® is building on 55 years of service with continued, feedback-driven enhancements aiming to bring more comfort, choice, and signature Hospitality to every flight. From assigned seating to ongoing investments in the cabin experience, the airline is continuing to deliver meaningful updates across the entire Customer journey. Currently, Southwest Customers can enjoy fast, free WiFi¹ for Rapid Rewards® members thanks to T-Mobile®, with Starlink set to debut this summer. Starting on Thursday, June 18, the airline is introducing Siete® Mini Grain Free Mexican Wedding Cookies along with Cherry Coke™ Zero Sugar², reflecting Southwest's commitment to listening, evolving, and delivering a consistently enjoyable experience from takeoff to touchdown.

To access broadcast-quality footage, high-res images, and photos, visit swamedia.com where you can sign up for ongoing updates from Southwest Airlines.

ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 122 airports across 12 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline³. By empowering its more than 73,000⁴ People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 134 million Customers carried in 2025. Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship.

Where available. Available only on WiFi enabled designated aircraft. Excluding Hawaii interisland flights, complimentary non-alcoholic drinks and snacks are served on select flights 251 miles or more. Extra Legroom premium snacks will be served on select flights 301 miles or more. Service may also be limited at the discretion of Southwest Airlines®. Based on U.S. Dept. of Transportation quarterly Airline Origin & Destination Survey as of Q4 2025 Fulltime-equivalent active Employees as of March 31, 2026. SOURCE Southwest Airlines Co.

Southwest Airlines Co. (LUV) Presents at Bernstein 42nd Annual Strategic Decisions Conference Transcript

While the market remains mesmerized by artificial intelligence (AI) stocks, there is a sector of the old economy that has outperformed over the past month.

Airline stocks United Airlines (UAL +2.58%), Delta Air Lines (DAL +1.56%), and Southwest Airlines (LUV +2.66%) are up handsomely, with Delta even outperforming the S&P 500 in 2026 with its 17.4% rise so far. These are somewhat surprising developments, given that the war in Iran has sent the price of oil and jet fuel soaring.

Airline stocks and soaring fuel prices The following chart shows a broad-based recovery over the past month.

Data by YCharts.

It's surprising, given that oil prices are still in the $90-per-barrel range, compared with $60 per barrel before the conflict began. Moreover, the unavailability of crude oil and refined products that typically flow through the Strait of Hormuz has sent jet fuel crack spreads soaring this year.

For example, Delta CEO Ed Bastian said, "The war in the Middle East has driven an unprecedented spike in jet fuel, with prices roughly double what they were earlier in the year." The company declined to update its full-year guidance because of the uncertainty created by the conflict and its impact on jet fuel prices.

Image source:Getty Images.

Wall Street downgrades expectations That said, investors and Wall Street analysts have wasted no time in lowering expectations for airline stocks. Here's how the Wall Street consensus for adjusted diluted earnings per share (EPS), according to S&P Global Market Intelligence/Visible Alpha, has been lowered over the past three months for all three stocks.

Airline

EPS Estimate
3 Months Ago
for 2026

Current
EPS Estimate
for 2026

EPS Estimate
3 Months Ago
for 2027

Current
EPS Estimate
for 2027

United Airlines

$13.33

$9.46

$15.24

$14.59

Delta Air Lines

$7.19

$5.54

$8.20

$8.05

Southwest Airlines

$4.37

$2.71

$5.27

$4.44

Data source: S&P Global Marketplace/Visible Alpha.

There's a pronounced reduction in 2026 earnings expectations, but Delta and United's expectations haven't changed much for 2027.

Why Delta and United have outperformed All the airlines have been able to increase pricing to offset higher fuel costs because end demand remains high, and the market is pricing in a resolution to the conflict.

Regarding end demand, Delta's Bastian said in April, "The acceleration we saw in March is carrying forward into the June quarter." At the end of May, United CEO Scott Kirby said, "As everyone knows, demand has remained strong as is well publicized." That came at the same investment conference where Robert Jordan, CEO of low-cost airline Southwest, said:" [T]he consumer remains very strong despite this rise in fares. So I'm becoming increasingly bullish that we will be able to cover these fuel increases with revenue increases."

Where next for airlines While airlines have reduced capacity in response to rising fuel prices and earnings estimates have come down, Delta and United, in particular, have demonstrated they can push through price increases in the current environment, and they are likely to emerge as winners from a period of capacity constraints.

Moreover, both airlines have diversified their revenue streams, making them relatively insulated from the industry's decades-long cyclicality. Delta in particular remains a top stock to buy for 2026.

A Southwest Airlines jet comes in for a landing at LaGuardia Airport in New York City, New York, U.S., January 11, 2023. REUTERS/Mike Segar Purchase Licensing Rights, opens new tab

SummaryCompaniesMAX 7 revenue service expected in 2027Southwest focused on MAX, not second fleet typeStarlink rollout begins; Amazon Leo not ruled outRIO DE JANEIRO, June 6 (Reuters) - Southwest Airlines (LUV.N), opens new tab expects Boeing's (BA.N), opens new tab long-delayed 737 MAX 7 to enter ‌revenue service in 2027 and remains focused on the MAX family rather than adding another aircraft type to reduce risk, Chief Operating Officer Andrew Watterson told Reuters on Saturday.

Asked about Airbus's (AIR.PA), opens new tab A220, Watterson said Southwest ​was focused on the MAX.

The Reuters Inside Track newsletter is your essential guide during the World Cup. Sign up here.

"Diversification doesn't come through a second fleet type," Watterson said ​in an interview on the sidelines of the International Air Transport Association's annual ⁠meeting in Rio de Janeiro. "A second fleet type can increase your risk."

"It doesn't make ​sense to lose focus on that," he added.

The MAX 7 is still awaiting certification from ​the U.S. Federal Aviation Administration. Watterson said Southwest plans to do about six months of internal work after certification, including adding the aircraft to its operating specifications and manuals.

"The clock starts when they certify it," he ​said.

Watterson said the MAX 7 delay had not forced Southwest to hold back specific ​routes, but had limited its ability to better match aircraft size with demand. The penalty, he said, is ‌having ⁠too many larger aircraft and not enough smaller jets for periods or markets with lower demand.

STARLINK ROLLOUTSouthwest is also moving ahead with Starlink-powered Wi-Fi, but Tony Roach, the airline's chief customer and brand officer, said the carrier has not ruled out Amazon's Leo satellite network.

​Roach said Southwest expects ​to have an aircraft ⁠serviceable with Starlink later this month.

The airline has targeted equipping 300 aircraft with Starlink by year-end, but the pace depends on how fast ​Starlink can supply equipment, the executives added.

"Our tech ops can retrofit as ​fast as ⁠Starlink can deliver," Watterson said.

Watterson said activist investor Elliott Investment Management was right that Southwest had been too slow to change, even though many changes were already underway.

"What Elliott was unequivocally correct ⁠about ​is we were too slow," he said.

Watterson said ​investors had underestimated Southwest customers' willingness to pay for new products, and said revenue per available seat mile would be ​the "litmus test" for whether the changes are working.

Reporting by Rajesh Kumar Singh in Rio de Janeiro

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Rajesh Kumar Singh is the U.S. Aviation Correspondent at Reuters, based in Chicago, where he reports on airlines, aircraft manufacturers, and regulatory developments that shape the global aviation industry. Prior to this role, he covered U.S. manufacturing and trade policy, including the U.S.–China trade wars, where his work delved into the disruption facing American businesses and the strategic responses of major corporations. He began his career with Reuters in India, where he reported on a wide range of issues covering the country's economic complexities—from its recovery after the global financial crisis to the challenges of inflation and governance.

SAY WOW TO DISCOUNT TRAVEL: SOUTHWEST AIRLINES DELIVERS WEEK OF DEALS ON FLIGHTS, HOTELS, CARS, AND VACATIONS SAY WOW TO DISCOUNT TRAVEL: SOUTHWEST AIRLINES DELIVERS WEEK OF DEALS ON FLIGHTS, HOTELS, CARS, AND VACATIONS PR Newswire

DALLAS, June 8, 2026

Book an adventure for less and earn more Rapid Rewards® points for future travel

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) launches the Week of WOW, one of the carrier's biggest sales of the year. Starting today through June 11, Customers can save up to 40% off base fares using code FLYWOW for flights from Aug. 4 to Dec.16, 2026,1 along with promotions on hotels, rental cars, cruises, and Getaways by Southwest™ vacation packages. Check out some of the nonstop routes on sale now available on Southwest.com®, with one-way as low as 40% off between:

Baltimore and Orlando,Dallas and Las Vegas,Dallas and San Diego,Austin and New Orleans, andDenver and Tampa."Southwest Customers can book deals across all of our travel products—and with more than 20 million seats on sale, including millions of nonstop flights to destinations that our Customers love—our Week of WOW offers the perfect opportunity to book that trip," said Sabrina Callahan, Senior Vice President and Chief Digital & Marketing Officer. "Delivering some of the best deals of the year is another way we're focused on giving Customers more reasons than ever to fly Southwest, alongside our Legendary Hospitality, enhanced onboard offerings, rewarding loyalty program, and industry leading flexibility with no change or cancel fees."2

Savings All Along the Way
Customers can shop at Southwest.com for discounts on:

Fares: Using code FLYWOW, Customers can save up to 40% off base fares for select flights from Aug. 4 to Dec.16, 2026.1Rental Cars: Powered by Southwest's newly enhanced car rental platform, Customers can save up to 25% off base rates plus earn 1,200 Rapid Rewards points on two-day or longer car rentals with Dollar.3Cruises: Customers can earn 2X Rapid Rewards points on eligible cruises departing on or before Dec. 31, 2027.4Hotels: Customers can earn 5,000 Rapid Rewards bonus points or receive a 5,000 Rapid Rewards points discount for select hotel stays from June 8, 2026, through June 30, 2027.5More Reasons to Book the Vacation
Getaways by Southwest is bringing even more deals to Customers who want to book vacation packages. Customers can save up to $500 on a vacation package for two,6 plus two free checked bags.7

Unlock More Value as a Rapid Rewards Member
Join Rapid Rewards to unlock access to free WiFi thanks to T-Mobile®,8 tier benefits, and points by flying or spending with eligible partners. Members can purchase points to earn a reward to book their favorite destination or a new Southwest route. All Rapid Rewards rules and regulations apply at Southwest.com/rrterms.

ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co.operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 121 airports across 12 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline.9 By empowering its more than 73,00010 People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 134 million Customers carried in 2025. Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship.

1 Use code FLYWOW by June 11 for travel on select flights Aug. 4 to Dec. 16, 2026. Restrictions, exclusions, and blackouts apply. Seats/days/markets limited. Discount applied pre-government taxes/fees. Additional fees may apply.
2 No change fees: Fare difference may apply. No cancel fees: All fare types are eligible for cancellations without a fee. For round trip reservations, if one or both flight segments is booked with a Basic fare, cancellations are only permitted if either a) both flight segments are canceled or b) the Basic fare segment(s) is upgraded. Failure to cancel a reservation at least 10 minutes prior to original scheduled departure may result in forfeited travel funds.
3 Valid at participating Dollar airport locations. Valid for bookings June 8 to June 15, 2026, and vehicle pickup through Nov. 30, 2026. Taxes and fees excluded. Terms and exclusions apply.
4 Book June 8, 2026 to June 15, 2026. Terms apply. All Rapid Rewards rules and regulations apply and can be found at southwest.com/rrterms..
5 Book June 8, 2026 to June 15, 2026. Terms apply. All Rapid Rewards rules and regulations apply and can be found at southwest.com/rrterms. .
6 Based on 2-person, 5-night minimum. Restrictions, exclusions, and blackouts may apply. Seats/days/markets limited 1-day advance. purchase required. Additional fees may apply. See Getaways terms and conditions.
7 Getaways by Southwest™ Customers receive their first and second checked bags for free. Weight and size limits apply. Additional allowances, benefits, and/or exceptions may apply. Learn more.
8 Where available. Available only on WiFi-enabled designated aircraft.
9 Based on U.S. Dept. of Transportation quarterly Airline Origin & Destination Survey as of Q4 2025
10 Fulltime-equivalent active Employees as of March 31, 2026.

View original content:https://www.prnewswire.com/news-releases/say-wow-to-discount-travel-southwest-airlines-delivers-week-of-deals-on-flights-hotels-cars-and-vacations-302793734.html

SOURCE Southwest Airlines Co.

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Southwest Airlines (LUV - Free Report) Based in Dallas, TX, Southwest Airlines is a passenger airline that provides scheduled air transportation in the United States and 'ten near-international' markets. The company was incorporated in Texas in 1967 and commenced operations in 1971 with three Boeing 737 jets serving the cities of Dallas, Houston and San Antonio.

LUV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 14.62; value investors should take notice.

Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.09 to $2.81 per share. LUV also boasts an average earnings surprise of +247%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, LUV should be on investors' short list.