Southwest Airlines Co. (LUV) 10-Year Financial Performance & Capital Metrics

LUV • • Industrial / General

IndustrialsAirlines & AirportsLow-Cost & Ultra-Low-Cost CarriersUS Low-Cost Carriers

AboutSouthwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2021, the company operated a total fleet of 728 Boeing 737 aircrafts; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also provides inflight entertainment and connectivity services on Wi-Fi enabled aircrafts; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares. In addition, the company offers a suite of digital platforms to support customers' travel needs, including websites and apps; and SWABIZ, an online booking tool. Further, it provides ancillary services, such as Southwest's EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. The company was incorporated in 1967 and is headquartered in Dallas, Texas.Show more

Revenue $27.48B +5.3%
EBITDA $1.98B +13.3%
Net Income $465M
EPS (Diluted) 0.75 -1.3%
Gross Margin 16.22% +0.2%
EBITDA Margin 7.2% +7.5%
Operating Margin 1.17% +36.1%
Net Margin 1.69% -5.1%
ROE 4.46% +1.6%
ROIC 2.26% +41.8%
Debt/Equity 0.78 -11.0%
Interest Coverage 1.50 +58.0%

Technical Analysis

Key Insights

Based on financial data analysis

✓Strengths

✓Momentum leader: RS Rating 84 (top 16%)
✓Trading near 52-week high

✗Weaknesses

✗Weak 3Y average ROE of 4.7%
✗Profits declining 27.4% over 5 years
✗Negative free cash flow

Price & Volume

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Growth Metrics

Revenue CAGR

10Y3.98%

5Y4.15%

3Y20.29%

TTM0.64%

Profit (Net Income) CAGR

10Y-8.54%

5Y-27.37%

3Y-21.92%

TTM873.47%

EPS CAGR

10Y-7.47%

5Y-29.38%

3Y-22.48%

TTM1028.57%

ROCE

10Y Avg10.21%

5Y Avg-0.95%

3Y Avg2.07%

Latest1.4%

Peer Comparison

US Low-Cost Carriers

Name	Market Cap	Current Price	P/E Ratio	Revenue Growth 1Y	Net Margin	ROE	FCF Yield	Debt/Equity
LUVSouthwest Airlines Co.	22.29B	43.10	57.47	5.34%	1.38%	4.87%		0.78
SNCYSun Country Airlines Holdings, Inc.	925.67M	17.56	18.29	2.49%	5.25%	9.52%	12.7%	1.09
ULCCFrontier Group Holdings, Inc.	1.16B	5.08	13.37	5.18%	-3.65%	-31.34%		7.40
FLYYSpirit Aviation Holdings, Inc.		0.38	-0.03	-8.38%	-28.55%	-277.97%
JBLUJetBlue Airways Corporation	1.81B	4.98	-2.17	-3.49%	-5.16%	-20.66%		3.46
ALGTAllegiant Travel Company	1.63B	88.87	-6.59	0.11%	-11.36%	-28.84%	2.35%	1.97

Profit & Loss

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Sales/Revenue+	19.82B	20.43B	21.17B	21.96B	22.43B	9.05B	15.79B	23.81B	26.09B	27.48B
Revenue Growth %	0.07%	0.03%	0.04%	0.04%	0.02%	-0.6%	0.75%	0.51%	0.1%	0.05%
Cost of Goods Sold+	13.42B	14.06B	14.89B	15.91B	16.45B	10.94B	11.68B	19.06B	21.87B	23.02B
COGS % of Revenue	0.68%	0.69%	0.7%	0.72%	0.73%	1.21%	0.74%	0.8%	0.84%	0.84%
Gross Profit+	6.4B	6.22B	6.25B	6.06B	5.98B	-1.89B	4.12B	4.75B	4.22B	4.46B
Gross Margin %	0.32%	0.3%	0.3%	0.28%	0.27%	-0.21%	0.26%	0.2%	0.16%	0.16%
Gross Profit Growth %	0.4%	-0.03%	0%	-0.03%	-0.01%	-1.32%	3.18%	0.15%	-0.11%	0.06%
Operating Expenses+	2.28B	2.7B	2.85B	2.85B	3.03B	1.93B	2.39B	3.73B	4B	4.14B
OpEx % of Revenue	0.12%	0.13%	0.13%	0.13%	0.13%	0.21%	0.15%	0.16%	0.15%	0.15%
Selling, General & Admin	0	0	0	0	0	0	0	0	0	346M
SG&A % of Revenue	-	-	-	-	-	-	-	-	-	0.01%
Research & Development	0	0	0	0	0	0	0	0	0	0
R&D % of Revenue	-	-	-	-	-	-	-	-	-	-
Other Operating Expenses	2.28B	2.7B	2.85B	2.85B	3.03B	1.93B	2.39B	3.73B	4B	3.79B
Operating Income+	4.12B	3.52B	3.41B	3.21B	2.96B	-3.82B	1.72B	1.02B	224M	321M
Operating Margin %	0.21%	0.17%	0.16%	0.15%	0.13%	-0.42%	0.11%	0.04%	0.01%	0.01%
Operating Income Growth %	0.85%	-0.14%	-0.03%	-0.06%	-0.08%	-2.29%	1.45%	-0.41%	-0.78%	0.43%
EBITDA+	5.13B	4.74B	4.63B	4.41B	4.18B	-2.56B	2.99B	2.37B	1.75B	1.98B
EBITDA Margin %	0.26%	0.23%	0.22%	0.2%	0.19%	-0.28%	0.19%	0.1%	0.07%	0.07%
EBITDA Growth %	0.62%	-0.08%	-0.02%	-0.05%	-0.05%	-1.61%	2.17%	-0.21%	-0.26%	0.13%
D&A (Non-Cash Add-back)	1.01B	1.22B	1.22B	1.2B	1.22B	1.25B	1.27B	1.35B	1.52B	1.66B
EBIT	3.57B	3.52B	3.33B	3.26B	3.04B	-3.94B	1.76B	1.03B	869M	812M
Net Interest Income+	-81M	-51M	-30M	-24M	8M	-282M	-418M	-84M	347M	283M
Interest Income	9M	24M	35M	69M	90M	32M	13M	217M	583M	497M
Interest Expense	90M	75M	65M	93M	82M	314M	431M	301M	236M	214M
Other Income/Expense	-637M	-72M	-142M	-42M	0	-440M	-396M	-289M	409M	277M
Pretax Income+	3.48B	3.45B	3.27B	3.16B	2.96B	-4.26B	1.32B	728M	633M	598M
Pretax Margin %	0.18%	0.17%	0.15%	0.14%	0.13%	-0.47%	0.08%	0.03%	0.02%	0.02%
Income Tax+	1.3B	1.27B	-92M	699M	657M	-1.18B	348M	189M	168M	133M
Effective Tax Rate %	0.63%	0.65%	1.07%	0.78%	0.78%	0.72%	0.74%	0.74%	0.73%	0.78%
Net Income+	2.18B	2.24B	3.49B	2.46B	2.3B	-3.07B	977M	539M	465M	465M
Net Margin %	0.11%	0.11%	0.16%	0.11%	0.1%	-0.34%	0.06%	0.02%	0.02%	0.02%
Net Income Growth %	0.92%	0.03%	0.55%	-0.29%	-0.07%	-2.34%	1.32%	-0.45%	-0.14%	0%
Net Income (Continuing)	2.18B	2.18B	3.36B	2.46B	2.3B	-3.07B	977M	539M	465M	465M
Discontinued Operations	0	0	0	0	0	0	0	0	0	0
Minority Interest	0	0	0	0	0	0	0	0	0	0
EPS (Diluted)+	3.26	3.55	5.78	4.29	4.27	-5.44	1.61	0.87	0.76	0.75
EPS Growth %	1%	0.09%	0.63%	-0.26%	-0%	-2.27%	1.3%	-0.46%	-0.13%	-0.01%
EPS (Basic)	3.30	3.58	5.80	4.30	4.28	-5.44	1.65	0.91	0.81	0.81
Diluted Shares Outstanding	669M	633M	603M	574M	539M	565M	609M	642M	640M	643M
Basic Shares Outstanding	661M	627M	601M	573M	538M	565M	592M	593M	595M	598M
Dividend Payout Ratio	0.08%	0.1%	0.08%	0.13%	0.16%	-	-	-	0.92%	0.92%

Balance Sheet

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Total Current Assets+	4.02B	4.5B	4.82B	5.03B	5.97B	15.17B	18.04B	14.81B	13.96B	11.27B
Cash & Short-Term Investments	3.05B	3.31B	3.27B	3.69B	4.07B	13.33B	15.5B	12.29B	11.47B	8.72B
Cash Only	1.58B	1.68B	1.5B	1.85B	2.55B	11.06B	12.48B	9.49B	9.29B	7.51B
Short-Term Investments	1.47B	1.63B	1.78B	1.83B	1.52B	2.27B	3.02B	2.8B	2.19B	1.22B
Accounts Receivable	474M	546M	662M	568M	1.09B	1.13B	1.36B	1.04B	1.15B	1.11B
Days Sales Outstanding	8.73	9.76	11.41	9.44	17.67	45.58	31.37	15.94	16.14	14.74
Inventory	311M	337M	420M	461M	529M	414M	537M	790M	807M	800M
Days Inventory Outstanding	8.46	8.75	10.29	10.58	11.74	13.82	16.79	15.13	13.47	12.68
Other Current Assets	188M	310M	460M	310M	287M	295M	638M	686M	520M	639M
Total Non-Current Assets+	17.29B	18.79B	20.3B	21.21B	19.92B	19.41B	18.28B	20.56B	22.53B	22.48B
Property, Plant & Equipment	15.6B	17.04B	18.54B	19.52B	18.37B	17.72B	16.43B	18.74B	20.6B	20.43B
Fixed Asset Turnover	1.27x	1.20x	1.14x	1.12x	1.22x	0.51x	0.96x	1.27x	1.27x	1.35x
Goodwill	970M	970M	970M	970M	970M	970M	970M	970M	970M	970M
Intangible Assets	464M	426M	413M	399M	296M	295M	295M	296M	296M	300M
Long-Term Investments	40M	0	0	0	0	0	0	235M	280M	367M
Other Non-Current Assets	213M	348M	373M	320M	281M	427M	587M	324M	388M	414M
Total Assets+	21.31B	23.29B	25.11B	26.24B	25.89B	34.59B	36.32B	35.37B	36.49B	33.75B
Asset Turnover	0.93x	0.88x	0.84x	0.84x	0.87x	0.26x	0.43x	0.67x	0.72x	0.81x
Asset Growth %	0.08%	0.09%	0.08%	0.05%	-0.01%	0.34%	0.05%	-0.03%	0.03%	-0.08%
Total Current Liabilities+	7.41B	6.84B	6.91B	7.91B	8.95B	7.51B	9.16B	10.38B	12.26B	12.28B
Accounts Payable	178M	138M	186M	263M	304M	111M	156M	277M	265M	339M
Days Payables Outstanding	4.84	3.58	4.56	6.03	6.75	3.7	4.88	5.3	4.42	5.37
Short-Term Debt	637M	566M	348M	606M	734M	137M	371M	42M	29M	1.63B
Deferred Revenue (Current)	1000K	1000K	1000K	1000K	1000K	1000K	1000K	1000K	1000K	1000K
Other Current Liabilities	1.88B	1.63B	1.22B	1.26B	1.42B	1.87B	1.33B	1.67B	3.04B	1.43B
Current Ratio	0.54x	0.66x	0.70x	0.64x	0.67x	2.02x	1.97x	1.43x	1.14x	0.92x
Quick Ratio	0.50x	0.61x	0.64x	0.58x	0.61x	1.97x	1.91x	1.35x	1.07x	0.85x
Cash Conversion Cycle	12.35	14.92	17.15	13.98	22.67	55.7	43.28	25.76	25.19	22.05
Total Non-Current Liabilities+	6.55B	8B	8.61B	8.48B	7.11B	18.21B	16.74B	14.3B	13.72B	11.12B
Long-Term Debt	2.54B	2.82B	3.32B	2.77B	1.3B	9.65B	9.9B	7.9B	7.98B	5.07B
Capital Lease Obligations	0	0	0	0	1.52B	2.02B	1.69B	1.26B	985M	1.03B
Deferred Tax Liabilities	2.49B	3.37B	2.36B	2.43B	2.36B	1.63B	1.77B	1.99B	2.04B	2.17B
Other Non-Current Liabilities	1.47B	1.78B	2.1B	2.35B	870M	1.56B	1.22B	969M	981M	909M
Total Liabilities	13.95B	14.85B	14.68B	16.39B	16.06B	25.71B	25.91B	24.68B	25.97B	23.4B
Total Debt+	3.18B	3.39B	3.67B	3.38B	4B	12.2B	12.28B	9.47B	9.2B	8.06B
Net Debt	1.59B	1.71B	2.17B	1.52B	1.45B	1.14B	-199M	-19M	-88M	549M
Debt / Equity	0.43x	0.40x	0.35x	0.34x	0.41x	1.37x	1.18x	0.89x	0.87x	0.78x
Debt / EBITDA	0.62x	0.71x	0.79x	0.77x	0.96x	-	4.10x	4.00x	5.27x	4.07x
Net Debt / EBITDA	0.31x	0.36x	0.47x	0.35x	0.35x	-	-0.07x	-0.01x	-0.05x	0.28x
Interest Coverage	45.73x	46.96x	52.42x	34.47x	36.06x	-12.15x	3.99x	3.38x	0.95x	1.50x
Total Equity+	7.36B	8.44B	10.43B	9.85B	9.83B	8.88B	10.41B	10.69B	10.52B	10.35B
Equity Growth %	0.09%	0.15%	0.24%	-0.06%	-0%	-0.1%	0.17%	0.03%	-0.02%	-0.02%
Book Value per Share	11.00	13.33	17.30	17.17	18.24	15.71	17.10	16.65	16.43	16.10
Total Shareholders' Equity	7.36B	8.44B	10.43B	9.85B	9.83B	8.88B	10.41B	10.69B	10.52B	10.35B
Common Stock	808M	808M	808M	808M	808M	888M	888M	888M	888M	888M
Retained Earnings	9.41B	11.42B	14.62B	15.97B	17.95B	14.78B	15.77B	16.26B	16.3B	16.33B
Treasury Stock	-3.18B	-4.87B	-6.46B	-8.45B	-10.44B	-10.88B	-10.86B	-10.84B	-10.82B	-11.04B
Accumulated OCI	-1.05B	-323M	12M	20M	-61M	-105M	388M	344M	0	-25M
Minority Interest	0	0	0	0	0	0	0	0	0	0

Cash Flow

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	Dec 2023	Dec 2024
Cash from Operations+	3.24B	4.29B	3.93B	4.89B	3.99B	-1.13B	2.32B	3.79B	3.16B	462M
Operating CF Margin %	0.16%	0.21%	0.19%	0.22%	0.18%	-0.12%	0.15%	0.16%	0.12%	0.02%
Operating CF Growth %	0.12%	0.33%	-0.08%	0.25%	-0.19%	-1.28%	3.06%	0.63%	-0.17%	-0.85%
Net Income	2.18B	2.24B	3.49B	2.46B	2.3B	-3.07B	977M	539M	465M	465M
Depreciation & Amortization	1.01B	1.22B	1.22B	1.2B	1.22B	1.25B	1.27B	1.35B	1.52B	1.66B
Stock-Based Compensation	29M	33M	37M	46M	55M	0	58M	84M	0	0
Deferred Taxes	-109M	455M	-1.21B	301M	-55M	-716M	-21M	282M	159M	132M
Other Non-Cash Items	-1.03B	370M	258M	-15M	-138M	-261M	136M	51M	-231M	-206M
Working Capital Changes	1.07B	182M	227M	941M	606M	1.67B	-100M	1.48B	1.25B	-1.59B
Change in Receivables	-88M	-50M	-102M	117M	-94M	-294M	-701M	422M	-89M	19M
Change in Inventory	103M	-119M	-262M	-662M	-204M	63M	663M	0	-77M	0
Change in Payables	961M	226M	246M	545M	298M	231M	38M	936M	1.39B	-1.36B
Cash from Investing+	-1.91B	-2.27B	-2.41B	-2.04B	-303M	-16M	-1.26B	-3.75B	-2.93B	-261M
Capital Expenditures	-2.14B	-2.15B	-2.25B	-1.98B	-1.03B	-515M	-511M	-3.95B	-3.55B	-2.04B
CapEx % of Revenue	0.11%	0.11%	0.11%	0.09%	0.05%	0.06%	0.03%	0.17%	0.14%	0.07%
Acquisitions	-	-	-	-	-	-	-	-	-	-
Investments	-	-	-	-	-	-	-	-	-	-
Other Investing	2.03B	-2.04B	-2.12B	-1.92B	-627M	728M	-505M	-22M	0	797M
Cash from Financing+	-1.02B	-1.92B	-1.71B	-2.5B	-2.99B	9.66B	359M	-3.03B	-436M	-1.98B
Debt Issued (Net)	-	-	-	-	-	-	-	-	-	-
Equity Issued (Net)	-	-	-	-	-	-	-	-	-	-
Dividends Paid	-180M	-222M	-274M	-332M	-372M	-188M	0	0	-428M	-430M
Share Repurchases	-	-	-	-	-	-	-	-	-	-
Other Financing	3M	95M	131M	143M	-43M	-144M	77M	8M	29M	-23M
Net Change in Cash	-	-	-	-	-	-	-	-	-	-
Free Cash Flow+	1.09B	2.15B	1.68B	2.92B	2.96B	-1.64B	1.81B	-156M	-389M	-1.62B
FCF Margin %	0.06%	0.11%	0.08%	0.13%	0.13%	-0.18%	0.11%	-0.01%	-0.01%	-0.06%
FCF Growth %	0.02%	0.96%	-0.22%	0.74%	0.01%	-1.55%	2.1%	-1.09%	-1.49%	-3.16%
FCF per Share	1.64	3.39	2.79	5.08	5.49	-2.91	2.97	-0.24	-0.61	-2.52
FCF Conversion (FCF/Net Income)	1.48x	1.91x	1.13x	1.98x	1.73x	0.37x	2.38x	7.03x	6.80x	0.99x
Interest Paid	105M	100M	81M	107M	88M	212M	336M	305M	228M	220M
Taxes Paid	1.44B	902M	992M	327M	779M	19M	445M	20M	18M	9M

Key Ratios

Metric	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
Return on Equity (ROE)	30.86%	28.41%	36.97%	24.31%	23.37%	-32.86%	10.13%	5.11%	4.39%	4.46%
Return on Invested Capital (ROIC)	36.03%	27.66%	22.46%	20.05%	19.58%	-26.88%	12.76%	7.31%	1.59%	2.26%
Gross Margin	32.28%	30.48%	29.54%	27.58%	26.68%	-20.89%	26.06%	19.95%	16.19%	16.22%
Net Margin	11%	10.99%	16.48%	11.22%	10.26%	-33.97%	6.19%	2.26%	1.78%	1.69%
Debt / Equity	0.43x	0.40x	0.35x	0.34x	0.41x	1.37x	1.18x	0.89x	0.87x	0.78x
Interest Coverage	45.73x	46.96x	52.42x	34.47x	36.06x	-12.15x	3.99x	3.38x	0.95x	1.50x
FCF Conversion	1.48x	1.91x	1.13x	1.98x	1.73x	0.37x	2.38x	7.03x	6.80x	0.99x
Revenue Growth	6.53%	3.05%	3.65%	3.75%	2.11%	-59.66%	74.51%	50.82%	9.56%	5.34%

Revenue by Segment

	2016	2017	2018	2019	2020	2021	2022	2023	2024
Passenger	18.59B	19.14B	20.45B	20.78B	7.67B	14.07B	21.41B	23.64B	24.98B
Passenger Growth	-	2.94%	6.86%	1.57%	-63.11%	83.51%	52.20%	10.41%	5.68%
Product and Service, Other	-	-	1.33B	1.48B	1.22B	1.54B	2.23B	2.28B	2.33B
Product and Service, Other Growth	-	-	-	10.86%	-17.43%	25.78%	45.02%	2.24%	2.15%
Cargo and Freight	-	-	175M	172M	161M	187M	177M	175M	175M
Cargo and Freight Growth	-	-	-	-1.71%	-6.40%	16.15%	-5.35%	-1.13%	0.00%
Other	1.66B	1.86B	-	-	-	-	-	-	-
Other Growth	-	11.87%	-	-	-	-	-	-	-
Freight	171M	173M	-	-	-	-	-	-	-
Freight Growth	-	1.17%	-	-	-	-	-	-	-

Revenue by Geography

	2016	2017	2018	2019	2020	2021	2022	2023	2024
North America	-	-	21.4B	21.8B	8.9B	15.3B	23B	25B	26.7B
North America Growth	-	-	-	1.87%	-59.17%	71.91%	50.33%	8.70%	6.80%
Latin America	-	-	566M	615M	184M	475M	811M	828M	798M
Latin America Growth	-	-	-	8.66%	-70.08%	158.15%	70.74%	2.10%	-3.62%

Frequently Asked Questions

Valuation & Price

Southwest Airlines Co. (LUV) has a price-to-earnings (P/E) ratio of 57.5x. This suggests investors expect higher future growth.

Growth & Financials

Southwest Airlines Co. (LUV) reported $27.55B in revenue for fiscal year 2024. This represents a 76% increase from $15.66B in 2011.

Southwest Airlines Co. (LUV) grew revenue by 5.3% over the past year. This is steady growth.

Yes, Southwest Airlines Co. (LUV) is profitable, generating $379.0M in net income for fiscal year 2024 (1.7% net margin).

Dividend & Returns

Yes, Southwest Airlines Co. (LUV) pays a dividend with a yield of 1.55%. This makes it attractive for income-focused investors.

Southwest Airlines Co. (LUV) has a return on equity (ROE) of 4.5%. This is below average, suggesting room for improvement.

Southwest Airlines Co. (LUV) had negative free cash flow of $250.0M in fiscal year 2024, likely due to heavy capital investments.

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