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Southwest Airlines Q3 Earnings Beat
Southwest Airlines reports 500% EPS jump to $0.66 despite $820M fuel headwind.
In brief
Southwest Airlines reports 500% EPS jump to $0.66 despite $820M fuel headwind. Southwest Airlines delivered record Q3 2026 earnings with 500% EPS growth to $0.66, exceeding guidance despite $820 million fuel costs. Originally reported by BigGo Finance.
Q3 2026 Results
![[Southwest Airlines Co. Q3 2026 Earnings Call] Southwest's RASM Jumps 21.6%, EPS Soars 500% to $0.66 Despite $820 Million Fuel Headwind](https://img.biggo.com/LVVTWKLM-gZVtvCZgq8sTNlgU_XOEgcgHvZPddHaoSo/fit/1720/0/sm/0/aHR0cHM6Ly9pbWcuYmdvLm9uZS9uZXdzLWltYWdlL2Vhcm5pbmdzX2NhcmQvMjAyNi0xMC9VU19MVVZfMjAyNi0xMC0yMl8xNzkyNjg3MTQxLndlYnA.webp)
Southwest Airlines reported third-quarter 2026 adjusted earnings per share of $0.66, a 500% year-over-year increase, exceeding the midpoint of guidance despite an $820 million fuel headwind.
Margin Expansion
Adjusted operating margin expanded 4.8 points to 5.4% despite an $820 million year-over-year fuel headwind.
Record RASM
RASM surged 21.6% to an all-time record, surpassing the high end of guidance.
Revenue Growth
Record third-quarter operating revenue of $8.4 billion was driven by broad-based demand, with managed business revenues up 29%.
Q4 Guidance
For Q4, Southwest guides RASM up 19-21% and adjusted EPS of $0.55-$0.80, based on fuel at $4.55 per gallon.
CEO Confidence
CEO Bob Jordan emphasized that the transformation is complete and the focus has shifted to optimizing the business and investing in customer experience.
Customer Experience
The company announced enhancements to Rapid Rewards, including a new Platinum tier, international partnerships, and the ability to redeem points for ancillaries.
Starlink Wi-Fi
Southwest plans to complete its fleet-wide Starlink Wi-Fi rollout by this time next year and recently became the first U.S. airline to offer flight shopping through ChatGPT.
Capital Markets Day
Southwest will host a Capital Markets Day on March 2, 2.027, in New York, where it will share its multi-year financial framework and targets.
2027 Outlook
Management expressed confidence in expanding margins meaningfully in 2027 even with high fuel prices.
Q4 Revenue
The company expects approximately 65% of Q4 revenue already booked with adjusted EPS of $0.55-$0.80.
Fleet Strategy
Southwest plans approximately 67 new aircraft deliveries and 60 retirements in 2026, with net capital spending of $2.5-$2.75 billion.
At a glance
Southwest Airlines delivered record Q3 2026 earnings with 500% EPS growth to $0.66, exceeding guidance despite $820 million fuel costs.
