Southwest Airlines Company (LUV) has reported 31.58 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $351 million, or $0.57 a share in the quarter, compared with $513 million, or $0.79 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $372 million, or $0.61 a share compared with $569 million or $0.88 a share, a year ago. Revenue during the quarter went up marginally by 1.18 percent to $4,883 million from $4,826 million in the previous year period. Gross margin for the quarter contracted 81 basis points over the previous year period to 68.63 percent. Total expenses were 86.52 percent of quarterly revenues, up from 80.44 percent for the same period last year. That has resulted in a contraction of 609 basis points in operating margin to 13.48 percent.
Operating income for the quarter was $658 million, compared with $944 million in the previous year period.
However, the adjusted operating income for the quarter stood at $626 million compared to $952 million in the prior year period. At the same time, adjusted operating margin contracted 691 basis points in the quarter to 12.82 percent from 19.73 percent in the last year period.
Gary C. Kelly, chairman of the Board and chief executive officer, stated, "We are pleased to report strong first quarter 2017 profits and margins, especially considering the passenger revenue yield environment and higher fuel prices. Our balance sheet, liquidity, and cash flows also remained strong, enabling another quarter of substantial returns and rewards for our Employees and Shareholders.
Operating cash flow remains almost stableSouthwest Airlines Company has generated cash of $1,625 million from operating activities during the quarter, up 0.56 percent or $9 million, when compared with the last year period. The company has spent $470 million cash to meet investing activities during the quarter as against cash outgo of $175 million in the last year period.
The company has spent $984 million cash to carry out financing activities during the quarter as against cash outgo of $636 million in the last year period.
Cash and cash equivalents stood at $1,851 million as on Mar. 31, 2017, down 22.49 percent or $537 million from $2,388 million on Mar. 31, 2016.
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