One of the winners on the stock exchange Thursday was Southwest Airlines (LUV -0.44%). The ever-scrappy carrier's share price had plenty of lift, with investors sending it up by more than 5% following an estimate-beating quarterly earnings report.
An announcement of certain changes in operating strategy also helped. That 5%-plus gain contrasted with the S&P 500 index, which slumped to close 0.5% lower on the day.
Revenue growth and a double beat
Southwest unveiled its second-quarter numbers before the market open, revealing it booked $7.35 billion in revenue to set a new quarterly record. It was also nearly 5% higher than the second-quarter 2023 tally. This was fueled by heavy demand, as the number of passengers carried also notched an all-time record for the airline.
Going in the opposite direction was non-GAAP (adjusted) net income, which dived by 51% to $370 million ($0.58 per share).
Despite the bottom-line dive, Southwest's adjusted profitability was higher than the consensus analyst estimate of $0.52 per share. Revenue notched a beat too, albeit a more modest one, as the average pundit forecast was $7.32 billion.
Bye-bye open seating, hello premium offerings
In addition to the twin beats, investors were also encouraged by the company's announcement of strategic changes. Chief among these is its abandonment of open seating, a feature that has distinguished it from its assigned-seating peers for decades.
In line with many peers, Southwest also plans to begin offering premium products, like seats with extra legroom. These will ultimately comprise around one-third of seating across its fleet.
