Research Desk Line-up: Hawaiian Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 10, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Southwest Airlines Co. (NYSE: LUV), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=LUV, following the Company's posting of its second quarter fiscal 2017 results on July 27, 2017. The No. 4 US airline by passenger traffic reported that revenue grew 6.7%, while adjusted EPS gained 4%, both exceeding market estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Regional Airlines industry. Pro-TD has currently selected Hawaiian Holdings, Inc. (NASDAQ: HA) for due-diligence and potential coverage as the Company reported on July 25, 2017, its financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on Hawaiian when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on LUV; also brushing on HA. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=LUV

http://protraderdaily.com/optin/?symbol=HA

Earnings Reviewed

Southwest Airlines' total operating revenues increased 6.7% on a y-o-y basis to a quarterly record of $5.74 billion compared to revenue of $5.38 billion in Q2 2016, driven largely by quarterly record passenger revenues of $5.23 billion. The Company's revenue numbers exceeded analysts' estimates of $5.73 billion.

For Q2 2017, Southwest Airlines' operating income was $1.25 billion compared to $1.28 billion in Q2 2016. Excluding special items, the Company's reported quarter operating income was $1.21 billion compared with $1.27 billion in the prior year's same quarter.

During Q2 2017, Southwest Airlines' net income came in at $746 million, or $1.23 per diluted share, compared to net income of $820 million, or a quarterly record $1.28 per diluted share, in Q2 2016. Excluding special items, the Company's reported quarter net income was $748 million, or a quarterly record $1.24 per diluted share, compared with the prior year's same quarter net income of $757 million, or $1.19 per diluted share. Southwest Airlines' earnings exceeded Wall Street's estimates of $1.20 per share.

Operating Performance

For Q2 2017, Southwest Airlines' load factor of 85.6% was a quarterly record performance, with passenger revenue yield increasing 1.5% on a y-o-y basis. The Company's operating unit revenues (RASM) also increased 1.5% on a y-o-y basis, including less than one point of temporary pressure attributable to the transition to the new reservation system.

Southwest Airlines' total operating expenses increased 9.4% to $4.5 billion, or 4.1% on a unit basis, in Q2 2017 compared to the year ago same period. During the reported quarter, the Company recorded lease termination costs of $8 million as a result of the acquisition of two of its Boeing 737-300 aircraft previously under operating leases. Excluding special items in both periods, Southwest Airlines' total operating expenses increased 10.1% to $4.5 billion, or 4.7% on a unit basis, y-o-y.

During Q2 2017, Southwest Airlines' economic fuel costs totaled $1.93 per gallon, including $0.32 per gallon in unfavorable cash settlements from fuel derivative contracts compared to $1.81 per gallon in Q2 2016, which included $0.42 per gallon in unfavorable cash settlements from fuel derivative contracts. Based on the Company's existing fuel derivative contracts and market prices as of July 21, 2017, Q3 2017 economic fuel costs are estimated to be in the $1.95 to $2.00 per gallon range.

Liquidity and Capital Deployment

As of June 30, 2017, Southwest Airlines had approximately $3.2 billion in cash and short-term investments and a fully available unsecured revolving credit line of $1 billion. During the reported quarter, Moody's Investors Service upgraded the Company's senior unsecured debt to A3 from Baa1.

Southwest Airlines' net cash provided by operations during Q2 2017 was $746 million, capital expenditures were $551 million, and free cash flow was $195 million. The Company repaid $59 million in debt and capital lease obligations during the reported quarter and expects to repay approximately $136 million in debt and capital lease obligations during the remainder of 2017.

During Q2 2017, Southwest Airlines' returned $476 million to its shareholders through the payment of $76 million in dividends and the repurchase of 6.6 million shares in common stock for $400 million which completed its previous $2.0 billion share repurchase program. On May 17, 2017, Southwest Airlines' Board of Directors authorized a new $2.0 billion share repurchase program along with a 25% increase in the Company's quarterly dividend.

Fleet and Capacity

Southwest Airlines ended Q2 2017 with 735 aircraft in its fleet. This reflects the delivery of 13 new Boeing 737-800s and 5 pre-owned Boeing 737-700s as well as the retirement of 10 Classic aircraft in the reported quarter. During Q2 2017, the Company also added three pre-owned 737-700 aircraft to its fleet order book to be delivered this year for 2018 service. As of July 25, 2017, there were 67 Classic aircraft remaining in Southwest Airlines' fleet that it intends to retire by the end of Q3 2017. The Company's total aircraft, net of all Classic retirements, is expected to decline to 707 by year-end 2017 and grow to 750 aircraft by year-end 2018.

Outlook

For Q3 2017, Southwest Airlines is forecasting available seat miles (ASMs) to increase in the 4% to 5% range and its Q4 2017 ASMs to increase in the 1% to 2% range compared to the year-ago same periods. Southwest Airlines expects its Q3 2017 y-o-y RASM growth to be approximately 1%. Based on current cost trends, the Company estimates Q3 2017 unit costs, excluding fuel and oil expense, special items, and profit-sharing expense, to increase in 2% to 3% range on a y-o-y basis.

Stock Performance

Southwest Airlines' share price finished yesterday's trading session at $54.69, slightly sliding 0.22%. A total volume of 4.46 million shares have exchanged hands. The Company's stock price skyrocketed 3.34% in the past six months and 46.00% in the previous twelve months. Additionally, the stock gained 9.73% since the start of the year. Shares of the Company have a PE ratio of 16.71 and have a dividend yield of 0.73%. The stock currently has a market cap of $33.03 billion.

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SOURCE: Pro-Trader Daily