Southwest Posts Q1 Profit Rebound as Fuel Costs Temper Q2 Outlook

Overview

• Southwest reported EPS of $0.45 with operating margin up 8.1 points to 4.6% and operating cash flow up 65% to $1.4 billion.
• The company guided second‑quarter EPS to a range of $0.35 to $0.65 and flagged fuel price swings and geopolitical uncertainty as the biggest risks.
• Revenue quality improved as yields rose 11.6% year over year, helped by customers buying higher‑priced fare options, and Rapid Rewards enrollments climbed about 37%.
• Southwest sold three 737‑700s and two 737‑800s, booking about a $30–$40 million impact, and said its mostly unencumbered fleet lets it adjust capacity quickly.
• Fares were strong across the network, with recent softness in Mexican beach resorts and Hawaii improving, and the carrier highlighted product upgrades such as its Starlink Wi‑Fi partnership.