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Southwest Airlines Hits 52-Week High on Cheap Oil & Route

Shares of Southwest Airlines Co.LUV increased 0.32% and touched a 52-week high of $47.76 during yesterday's trading session, finally closing at $47.47. Year to date, shares of the company have gained over 12%.

Southwest Airlines' continued profits are mainly backed by the persistent slump in oil prices , which resulted in a 99.5% rise in operating income for the carrier in the third quarter.

Moreover, Southwest Airlines has decided to launch 10 new domestic as well as international routes keeping the forthcoming holiday season in mind. This is likely to boost passenger revenues further. Also, in the third quarter, Southwest Airlines outpaced the Zacks Consensus Estimate for both earnings and revenues.

Recently, the company reported impressive air traffic for the month of October. Traffic - measured in revenue passenger miles (RPMs) - came in at 9.96 billion, up 10.8% from 8.98 billion recorded a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) increased 7.2% to 11.6 billion. Meanwhile, the load factor or percentage of seats filled by passengers climbed to 85.9% from 83.1% in Oct 2014.

Southwest Airlines expects these positives to drive fourth-quarter 2015 operating revenue per ASM (RASM) by 1% from the prior-year quarter.

In three of the last four quarters, the company surpassed the Zacks Consensus Estimate, with an average beat of 3.64%, including a positive surprise of 2.17% in the previously concluded quarter.

Additionally, earnings estimate revisions have exhibited a positive trend. Over the past 60 days, the company witnessed positive estimate revisions for both the current year and the fourth quarter, leading the Zacks Consensus Estimate to move north by 2.3% to $3.45 and 12.5% to 81 cents, respectively.

Southwest Airlines presently carries a Zacks Rank #2 (Buy). Some other favorably ranked stocks in the same industry are Hawaiian Holdings, Inc. HA , SkyWest Inc. SKYW and Virgin America Inc. VA . Both Hawaiian Holdings and SkyWest sport a Zacks Rank #1 (Strong Buy) while Virgin America holds a Zacks Rank #2.

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SOUTHWEST AIR (LUV): Free Stock Analysis Report

HAWAIIAN HLDGS (HA): Free Stock Analysis Report

SKYWEST INC (SKYW): Free Stock Analysis Report

VIRGIN AMERICA (VA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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