Southwest Misses Q1 EPS by $0.01, Holds $4.00 Outlook; 60% Buy-Up Rate
Southwest Airlines posted adjusted Q1 earnings of $0.45 per share on $7.25 billion revenue versus forecasts of $0.46 and $7.29 billion, triggering a 3.8% share decline. The carrier maintained its $4.00 full-year EPS target and guided Q2 earnings of $0.35–$0.65, while premium upgrades lifted buy-up rates to 60% from 20%.
1. Q1 Earnings Miss and Outlook
Southwest Airlines posted adjusted Q1 earnings of $0.45 per share on $7.25 billion revenue, missing analyst forecasts of $0.46 and $7.29 billion and triggering a 3.8% share drop. Management held the full-year EPS target at $4.00 and forecasted Q2 adjusted earnings of $0.35–$0.65 per share, reflecting uncertainty in fuel prices and demand.
2. Product Enhancements Drive Buy-Up Growth
New offerings like extra legroom seating, assigned seats, free Wi-Fi for loyalty members, Starlink installation and larger bins lifted buy-up rates to 60% from about 20% last year, contributing to record unit revenue despite rising fuel costs.