Southwest Airlines’ stock slides 6% premarket as airline says revenue has not recovered to prepandemic levels

Southwest Airlines Co.’s stock
LUV,
+2.05%
tumbled 6% premarket Thursday, after the airline said its revenue has not yet recovered to prepandemic levels and it’s adjusting its 2024 flight schedule to reflect changes to customer patterns. The airline made the comments as it reported second-quarter earnings showing net income of $683 million, or $1.08 a share, for the quarter, down from $760 million, or $1.20 a share, in the year-earlier period. Adjusted per-share earnings came to $1.09, matching the FactSet consensus. Revenue climbed to $7.037 billion from $6.728 billion a year ago, ahead of the $6.997 billion FactSet consensus. Revenue was a record driven by strong demand for leisure travel. “Further, we continue to expect $1.0 billion to $1.5 billion of pre-tax profit contribution in full year 2023 from strategic initiatives outlined at our Investor Day last December,” Chief Executive Bob Jordan said in a statement. “Based on current revenue and cost trends, we expect record operating revenue and a profitable outlook again for third quarter 2023 and continue to expect year-over-year margin expansion for full year 2023.” Still, the airline said its network is largely restored, but not yet optimized.  “We are working to align our network, fleet plans, and staffing to better reflect the current business environment,” he said. The company is now expecting revenue per available seat mile to fall 3% to 7% in the third quarter and for available seat miles to be up 14% to 15% for the full year. The stock has gained 7% in the year to date, while the S&P 500
SPX,
-0.02%
has gained 19%.