Southwest Airlines (LUV) Q3 2026 Earnings
Excludes $30M impairment of long-lived assets, $30M severance and related costs, and $13M litigation accruals, net of $16M tax benefit
How Did LUV Stock React to Q3 2026 Earnings?
Did LUV Beat Earnings? Q3 2026 Results
Yes. Southwest Airlines reported Q3 2026 earnings of $0.66 a share on Oct 21, 2026, beating the $0.57 consensus estimate by 15.5%. Revenue was $8.4B against a $8.2B estimate.
Southwest Airlines delivered a convincingly strong third quarter for fiscal 2026, beating Wall Street estimates on both the top and bottom lines as a powerful revenue recovery overshadowed a significant fuel cost headwind. The Dallas-based carrier posted adjusted EPS of $0.66, clearing the $0.57 consensus by 15.49%, while revenue climbed 21.2% year-over-year to $8.42 billion, edging past the $8.24 billion estimate. The primary engine behind the beat was a surge in unit revenue, with RASM reaching 18.55 cents and average passenger fares jumping to $231.69 from $182.56 a year ago, as demand for the airline's enhanced product proved resilient. That momentum came despite fuel cost per gallon of $3.92, which management said weighed on adjusted EPS by $1.08. Looking ahead, Southwest guided full-year 2026 adjusted EPS at $2.60 to $2.85, with Q4 RASM growth of 19% to 21%, though an assumed Q4 fuel cost of roughly $4.55 per gallon signals that cost pressures are far from resolved.
- All-time record unit revenues (RASM up 21.6% YoY) driven by strong demand for the enhanced Southwest product
- Record passenger yield — highest in Company history
- Successful lapping of bag fee and other commercial initiatives introduced last year
- Managed business revenue reached a third quarter record with 20 of the 50 all-time top managed business booking days
- Disciplined capacity management with ASMs down 0.4% year-over-year
- Average passenger fare increased to $231.69 from $182.56 year-over-year
“Customers are responding to the enhanced Southwest offering, and it shows in our results. Demand remained strong as we lapped last year's bag fee and other commercial initiatives, reinforcing our belief that the earnings power we've built is durable, even with significantly higher fuel costs.”
Southwest Airlines CEO, on the earnings call
What Is Southwest Airlines's Outlook?
For Q4 2026, Southwest guides adjusted EPS of $0.55 to $0.80, RASM growth of 19%–21% year-over-year, ASM growth of 3%–4%, and CASM-X growth of 4.0%–4.5% (including a 1.0 point headwind from 737-700 seat removals for extra legroom). Q4 fuel cost per gallon is assumed at approximately $4.55 based on the October 15 forward curve. Full-year 2026 adjusted EPS is guided at $2.60 to $2.85. Full-year capacity growth is expected at approximately 1.2% (reduced from 1.5%). Net capital spending is expected between $2.5 billion and $2.75 billion. The company expects 67 Boeing 737-8 and 737-7 deliveries and approximately 60 retirements in 2026. Management notes robust demand has continued into Q4 and the current fare environment is assumed to remain broadly intact. A Capital Markets Day is planned for March 2, 2027 in New York City.
LUV YoY Financials
| Metric | Q3 2026 | Q3 2025 | Year over year |
|---|---|---|---|
| Revenue | $8.4B | $6.9B | +21.2% |
| Operating Income | $379.0M | $35.0M | +982.9% |
| Net Income | $270.0M | $54.0M | +400.0% |
LUV Revenue by Segment
When Does Southwest Airlines Report Next?
Figures from SEC filings and company reports. Not investment advice.