Southwest posts back-to-back quarterly losses
— -- The airline reported Thursday that it lost $56 million, or 8 cents a share, last quarter. However, it made a profit for all of 2008, when other U.S. airlines posted losses because of high fuel costs midyear and a tumbling demand for travel amid a worsening economy.
The discount airline said it earned $178 million, or 24 cents a share, for the year. That keeps intact a string of profitable years dating to 1973. The profit was diluted by $117 million in fourth-quarter charges mostly tied to fuel contracts bought earlier in the year before oil prices plunged. In all, Southwest's 2008 earnings were down 72% from $645 million in 2007.
The Dallas-based carrier last reported back-to-back quarterly losses in the fourth quarter of 1990 and the first quarter of 1991. In the third quarter of 2008 it reported a net loss of $120 million, or 16 cents share.
Excluding one-time charges, Southwest earned a small fourth-quarter profit of $61 million, or 8 cents a share. That was down 33% from the fourth quarter of 2007, but 3 cents a share better than what analysts had expected on average, according to a survey by Thomson Reuters.
Southwest CEO Gary Kelly acknowledged that last year was one of the most difficult years in the company's 38-year history and for the entire industry. "I, for one, am very glad to see that 2008 is over," he said.
Southwest's shares jumped 17% on Thursday, to $9.81. Most other U.S. carriers' shares also gained. A day earlier, airline stock prices fell after the parents of American and United Airlines reported large fourth-quarter losses. Southwest was the only U.S. carrier whose share price didn't fall Wednesday.
Looking ahead to this year, Kelly said he's "guardedly optimistic" that Southwest can overcome the weak demand for travel that has hit the industry. The airline has cut its capacity 4.4% for the first quarter of this year in response.
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