Based on its fourth-quarter financial results, Southwest Airlines is beginning the new year on the right foot.
The low-cost carrier exceeded Wall Street expectations on Thursday, reporting an adjusted profit of 56 cents per share for the fourth quarter ending December 31, 2024. That was up significantly from analysts' average estimate of 44 cents, according to data compiled by LSEG, reported by Reuters.
Meanwhile, Southwest's operating revenue rose 1.6 percent to $6.93 billion from the previous year.
The airline anticipates first-quarter revenue per available seat mile (RASM) to grow about 5-7 percent, well above analysts' expectation of a 2.62 percent increase.
"While we still have much work to do, we are pleased that the improvements from our tactical initiatives are materializing faster than expected, and our progress continues to be further supported by a constructive demand environment and industry backdrop," CEO Bob Jordan said.
The positive news comes after a tumultuous year exasperated by the Boeing 737 MAX debacle that forced Southwest to reconsider its business strategy to meet aggressive investor demands.
Rising labor costs have also hurt the carrier's bottom line.
Southwest, which operates an all-Boeing fleet, said it expects to receive more than three dozen Boeing 737 MAX 8 aircraft in 2025.
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