$LUV · SOUTHWEST AIRLINES CO

Southwest Airlines reported Q3 2026 results: net income of $270M ($0.55 diluted EPS), adjusted net income of $328M ($0.66 adjusted EPS). Operating revenues hit a record $8.4B, up 21.2% YoY, with all-time record RASM up 21.6% on capacity down 0.4%. Operating margin expanded 4.0 points to 4.5% (adjusted 5.4%, up 4.8 points) despite an $821M increase in fuel costs. The company guided Q4 2026 adjusted EPS of $0.55-$0.80 and full-year 2026 adjusted EPS of $2.60-$2.85.

Extended-hours last trade $40.20, up 0.80% vs regular close and 0.76% vs price-at-filing, indicating a modestly positive initial reaction to record revenue and margin expansion.

Southwest delivered record revenue and all-time record unit revenues while expanding margins despite an $821M fuel headwind, signaling durable earnings power.

Record unit revenue and 21.6% RASM growth stand out in an airline sector facing elevated fuel costs, with Southwest lapping prior-year bag fee and commercial initiatives.

Q4 fuel cost per gallon assumed at ~$4.55, up sharply from Q3's $3.92, a continued margin headwind. Boeing delivery dependence and activist shareholder costs are flagged as risks.