Southwest Airlines to Report Q3 Earnings: What's in the Cards?

Southwest Airlines Co. LUV is scheduled to report third-quarter 2025 results on Oct. 22.

Southwest Airlines has an encouraging earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average beat of 59.13%.

Let’s see how things have shaped up for Southwest Airlines this earnings season.

Factors Likely to Have Influenced LUV’s Q3 Performance

We expect LUV's performance in the to-be-reported quarter to have been boosted by an uptick in total revenues, driven by high passenger revenues as domestic air-travel demand stabilizes. Our estimate for passenger revenues in the to-be-reported quarter indicates a 1.3% increase from third-quarter 2024 actuals.

The Zacks Consensus Estimate for LUV’s third-quarter 2025 revenues is pegged at $6.97 billion, indicating 1.44% growth year over year. The Zacks Consensus Estimate for LUV’s third-quarter 2025 earnings has been revised upward by more than 100% in the past 60 days to 1 cent per share. However, the consensus mark implies a 93.33% downside from the year-ago actual.

On the contrary, geopolitical uncertainty, tariff-related pressures, and persistent inflation are expected to weigh on LUV’s operations. Escalated labor and airport costs are also likely to have been high, which would have hurt the company’s bottom-line performance in the September quarter. Despite costs on aircraft fuel decreasing year over year, LUV expects to continue experiencing increased cost pressure. LUV expects CASM, excluding fuel, oil and profit-sharing expenses, and special items, to increase 3.5-5.5% in the third quarter of 2025 from the comparable period in 2024.

What Our Model Says About LUV

Our proven model does not conclusively predict an earnings beat for Southwest Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Southwest Airlines has an Earnings ESP of -268.00% and a Zacks Rank #3 at present.

Highlights of LUV’s Q2 Earnings

Southwest Airlines reported disappointing second-quarter 2025 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.

Quarterly earnings of 43 cents missed the Zacks Consensus Estimate of 51 cents and declined 25.9% year over year. Revenues of $7.24 billion missed the Zacks Consensus Estimate of $7.29 billion and declined 1.5% year over year. Passenger revenues (which accounted for 91.5% of the top line) decreased 1.3% year over year to $6.62 billion.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Wabtec CorporationWAB has an Earnings ESP of +1.32% and a Zacks Rank #2 at present. WAB is scheduled to report third-quarter 2025 earnings on Oct. 22. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wabtec has an impressive earnings surprise track record, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missed the mark in the remaining quarter), with the average beat being 5.41%. The Zacks Consensus Estimate for WAB’s third-quarter 2025 earnings has been revised 1.60% upward in the past 90 days.

Shares of Wabtec have gained 10.6% over the past year. WAB’s third-quarter 2025 earnings are expected to grow 13.50% year over year. 

Expeditors International of Washington, Inc. (EXPD) has an Earnings ESP of +1.43% and a Zacks Rank #3 at present. EXPD is scheduled to report third-quarter 2025 earnings on Nov. 4.  

Expeditors has an impressive earnings surprise track record, having surpassed the Zacks Consensus Estimate in each of the last four quarters, with the average beat being 15.30%.

Expeditors’ third-quarter 2025 earnings are expected to decline 14.11% year over year. The Zacks Consensus Estimate for EXPD’s third-quarter 2025 earnings has been revised upward by 2.94% to $1.40 per share in the past 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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