Southwest Airlines reported Q2 results with adjusted EPS beating estimates but revenue missing. The stock slid after hours due to Q3 adjusted EPS guidance coming in significantly below analyst expectations, despite a full-year earnings outlook that slightly exceeds estimates.
Southwest Airlines (LUV) reported mixed Q2 results, with adjusted EPS of 94 cents significantly beating the 51-cent estimate, but revenue of $8.43 billion falling short of the $8.58 billion consensus. The primary driver for the stock's after-hours slide was the Q3 adjusted earnings guidance of 50-75 cents per share, which is considerably lower than the 82-cent analyst estimate. While the full-year 2026 adjusted earnings guidance of $3.25-$4.25 per share slightly exceeds the $3.17 estimate, the immediate-term Q3 outlook is weighing heavily on investor sentiment. This suggests short-term pressure on LUV shares as the market reacts to the weaker near-term profit forecast, despite management's optimistic tone about 'earnings power' and future optimization.