Southwest Airlines (LUV) Q2 2026 Earnings
GAAP EPS of $0.47 includes a $285 million breakage revenue adjustment (reversal of breakage revenue from 2022–2025 non-expiring flight credits) and $15 million in severance and related costs. Net income tax impact of special items was $68 million.
How Did LUV Stock React to Q2 2026 Earnings?
S&P 500 over the same 30 days: +3.43%.
Did LUV Beat Earnings? Q2 2026 Results
Yes. Southwest Airlines reported Q2 2026 earnings of $0.94 a share on Jul 22, 2026, beating the $0.52 consensus estimate by 80.2%. Revenue was $8.4B against a $8.6B estimate.
Southwest Airlines delivered a convincing earnings beat in the second quarter of 2026, posting adjusted EPS of $0.94 against a consensus estimate of $0.52, a gap of roughly 80% that reflected the first full quarter with the carrier's transformation initiatives fully operational. Revenue of $8.43 billion rose 16.4% year over year, though it fell just short of the $8.58 billion analysts had expected, a modest miss that was partly shaped by a $285 million reversal of breakage revenue tied to non-expiring flight credits recognized between 2022 and 2025. Underneath that accounting adjustment, adjusted operating revenues climbed 20.3%, driven by a surge in managed business travel and an average passenger fare of $225.61, up from $186.65 a year ago. Fuel costs, while still a headwind of $1.17 per adjusted share, came in at $3.92 per gallon, below the company's own $4.10 to $4.15 guidance range. Looking ahead, Southwest guided full-year 2026 adjusted EPS to $3.25 to $4.25, trimming capacity growth expectations to approximately 1.5% while projecting third-quarter RASM growth of 17.5% to 19.5%.
- Managed business revenues reached all-time quarterly record, increasing 30% year-over-year
- Rapid Rewards new enrollments up 35% year-over-year with record tier qualifiers, growing to nearly 100 million members
- Chase co-branded credit card acquisitions accelerated 28% year-over-year
- Average passenger fare increased 20.9% year-over-year to $225.61
- Load factor improved 0.8 points to 79.3% on essentially flat capacity (+0.2%)
- CASM-X increased only 3.4% year-over-year, below prior guidance
- Fuel cost of $3.92 per gallon came in below prior assumptions of $4.10 to $4.15
- Adjusted unit revenues (RASM) increased 20.1%, exceeding prior guidance
“Second quarter results demonstrate the earnings power of our business. We delivered results well ahead of consensus expectations despite nearly $900 million of additional fuel expense year-over-year.”
Southwest Airlines CEO, on the earnings call
What Is Southwest Airlines's Outlook?
For full-year 2026, Southwest guides adjusted EPS of $3.25 to $4.25, replacing prior guidance of at least $4.00. Third quarter 2026 adjusted EPS is guided at $0.50 to $0.75. Q3 RASM is expected to increase 17.5% to 19.5% year-over-year, with CASM-X up 3.5% to 4.0% (including a 1.1 point headwind from 737-700 seat removals for extra legroom). Q3 fuel cost per gallon is assumed at $3.70 to $3.75. Full-year capacity growth is now expected at approximately 1.5%, down from prior guidance of 2%. The company expects 64 Boeing 737-8 deliveries and approximately 60 retirements in 2026. Net capital spending is expected toward the low end of, or below, the $3.0 billion to $3.5 billion range.
LUV YoY Financials
| Metric | Q2 2026 | Q2 2025 | Year over year |
|---|---|---|---|
| Revenue | $8.4B | $7.2B | +16.4% |
| Operating Income | $285.0M | $225.0M | +26.7% |
| Net Income | $233.0M | $213.0M | +9.4% |
LUV Revenue by Segment
When Does Southwest Airlines Report Next?
Figures from SEC filings and company reports. Not investment advice.