Southwest Airlines reported all record resultsStaff writer ▼ | April 24, 2015
Southwest Airlines reported its first quarter 2015 results. Record first quarter net income, excluding special items, was $451 million, or $.66 per diluted share.
Southwest Airlines Net income was $451 million
This represented a 266.7 percent increase from first quarter 2014 and exceeded the First Call consensus estimate of $.65 per diluted share.
Record first quarter net income was $453 million, or $.66 per diluted share, which included $2 million (net) of favorable special items, compared with first quarter 2014 net income of $152 million, or $.22 per diluted share, which included $26 million (net) of favorable special items.
Record first quarter operating income was $780 million. Excluding special items, record first quarter operating income of $770 million, resulting in an operating margin2 of 17.4 percent.
Strong free cash flow was $859 million used to return $381 million to Shareholders through dividends and share repurchases, and to repay $51 million in debt and capital lease obligations.
Return on invested capital, before taxes and excluding special items (ROIC)1, for the 12 months ended March 31, 2015, was 25.6 percent, compared with 14.2 percent for the 12 months ended March 31, 2014.
Gary C. Kelly, chairman, president, and chief executive officer, stated, "We are thrilled to report an exceptionally strong first quarter 2015 earnings performance. Our net income, excluding special items, of $451 million, or $.66 per diluted share, far surpasses any first quarter profit in our history and represents our eighth consecutive quarter of record profits.
"Our first quarter 2015 operating income, excluding special items, increased over 200 percent year-over-year to $770 million, resulting in a first quarter record 17.4 percent operating margin. Our ROIC for the 12 months ended March 31, 2015, was an outstanding 25.6 percent. These superb results earned our 47,000 hard-working and dedicated Employees a first quarter record $126 million profitsharing accrual, up 334.5 percent from first quarter 2014.
"Total operating revenues were a first quarter record $4.4 billion, driven by a 6.2 percent year-over-year increase in passenger revenues and double-digit year-over-year percentage growth in freight revenues. Customer demand was strong throughout first quarter 2015, resulting in a record first quarter load factor of 80.1 percent.
"As expected, first quarter 2015 passenger revenues grew in line with our available seat mile (ASM) growth of 6.0 percent, year-over-year. Considering the 4.1 percent increase in stage length and the 2.7 percent increase in seats per trip3 (gauge) from our fleet modernization, year-over-year, we are very pleased with our first quarter 2015 unit revenue performance. Strong revenue and booking trends have continued thus far in April.
"Second quarter 2015 year-over-year comparisons are more challenging, largely due to last year's exceptional and above-trend performance. With the continuation of year-over-year increases in stage length and gauge, we currently expect our April 2015 passenger unit revenues to decline, year-over-year, approximately two percent. ■