Why Southwest Airlines Stock Is Falling Today
The high-profile meltdown Southwest Airlines (NYSE: LUV) experienced over the December holiday season impacted the company's fourth quarter a lot more than analysts had predicted, causing results to miss expectations. Investors don't like surprises, and shares of Southwest were down 5% as of 11:27 a.m. in the wake of the company's Q4 report.
We knew going into earnings season that Southwest had a difficult quarter. A winter storm that hit much of the United States during the holiday travel period caused a system meltdown at the carrier, leading to the cancellation of more than 16,000 flights. In early January, Southwest updated its guidance for Q4 as a result of the storm. But analysts still underestimated the impact.
Southwest reported a loss of $0.38 per share in the quarter, significantly worse than the $0.09-per-share loss that analysts had forecast, on revenue of $6.17 billion that slightly missed expectations. The airline said that the "operational disruption" that occurred in December impacted results by about $800 million before taxes.
Source Fool.com
