Southwest Airlines: Strong Q2 Earnings, But Headwinds Increasing
Three months ago, Southwest Airlines (NYSE: LUV) reported a disappointing loss for the first quarter. However, business came roaring back in the second quarter. This week, the low-fare airline giant reported that its revenue and net income surged to record highs last quarter.
Despite the strong earnings report, Southwest Airlines stock sank more than 6% after the earnings release on Thursday. Investors were understandably rattled by the company's guidance, which calls for slowing unit revenue growth and continued cost headwinds in the third quarter. Nevertheless, this dip looks like an attractive opportunity to scoop up Southwest Airlines stock at a discount.
Last quarter, Southwest Airlines' revenue jumped 13.9% compared to Q2 2019, reaching an all-time high of $6.7 billion, even though the carrier operated 6.7% less capacity than it did in 2019. Unit revenue surged 22% over this period.
Source Fool.com
