By RTT News, October 24, 2013, 07:31:00 AM EDT
(RTTNews.com) - Southwest Airlines Co. ( LUV ) Thursday said third-quarter profit increased from the prior year, amid a modest growth in revenues. Both adjusted earnings and revenues came ahead of Wall Street expectations. The stock added 3.4 percent in pre-market trading.
Net income for the quarter surged to $259 million or $0.37 per share from $16 million or $0.02 per share last year.
The latest results included $18 million of favorable special items, while the prior-year results included $81 million of unfavorable special items.
Adjusted earnings were $241 million or $0.34 per share, while it had totaled $97 million or $0.13 per share last year. On average, 14 analysts polled by Thomson Reuters expected earnings of $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Gary Kelly, CEO, said, "We are very pleased to report a record third quarter earnings performance. Our People delivered very strong year-over-year earnings growth as we continued to transform our Company for the future. Our continued focus on strategic initiatives is paying off...''
Total operating revenues improved 5.5 percent to $4.545 billion from $4.309 billion. Wall Street expected revenues of $4.53 billion.
Operating unit revenues increased 4.5 percent on a 1 percent rise in available seat miles and a 4 percent increase in average seats per trip.
Economic fuel costs declined 5.7 percent in the quarter, driven by lower prices per gallon and less fuel consumed per available seat mile.
Based on stable current market prices and the company's existing fuel derivative contracts, Southwest expects its fourth- quarter economic fuel price per gallon to be comparable to the third quarter.
The company said it is on track with its plan to fully integrate AirTran into Southwest Airlines by the end of next year. The airline expects to achieve $400 million in annual net pre-tax synergies in 2013.
LUV closed at $16.41 on Wednesday. The stock added 3.4 percent in pre-market trading to $16.97.
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