Investing

No Profits For Southwest (LUV, UAL)

Southwest Airlines Co. (NYSE: LUV) is supposed to be one of the best airlines out there.  It has a loyal customer base and it has a better safety record than many other carriers.  Unfortunately, it is also now having to feel the force of high oil costs.  The airline has now said today that it does not expect to report a first quarter profit.

The company CFO released data at a J.P. Morgan conference and said that fuel costs of about $3.50 per gallon were about $0.15 higher than it anticipated when it was selling its tickets.  Something that will be cautious for the entire sector is that the claim is that fare increases were referred to as less effective because there were many small increases in the last year.  Revenue per available seat mile was recently lower as well and bookings were not as strong as expected.

Thomson Reuters has estimates pegged at $0.03 EPS, roughly the same as a year ago. Perhaps the larger looking question is whether or not the June quarter can be hit at $0.30 EPS and then the $0.78 EPS target for all of 2012 as Thomson Reuters sees.  While high prices have backed off a bit, fuel is not exactly cheap by any means today.

If this was a huge surprise it has not been reflected in the stock as shares are currently down only $0.02 at $8.26 on the day.  Rival United Continental Holdings (NYSE: UAL) is still up by $0.08 at $19.70 on the day.

JON C. OGG

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.