Southwest Airlines Company (LUV) has reported 2.61 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $522 million, or $0.84 a share in the quarter, compared with $536 million, or $0.82 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $463 million, or $0.75 a share compared with $591 million or $0.90 a share, a year ago.
Revenue during the quarter went up marginally by 1.99 percent to $5,076 million from $4,977 million in the previous year period. Gross margin for the quarter contracted 205 basis points over the previous year period to 69.58 percent. Total expenses were 83.33 percent of quarterly revenues, up from 79.39 percent for the same period last year. That has resulted in a contraction of 395 basis points in operating margin to 16.67 percent.
Operating income for the quarter was $846 million, compared with $1,026 million in the previous year period.
However, the adjusted operating income for the quarter stood at $768 million compared to $992 million in the prior year period. At the same time, adjusted operating margin contracted 480 basis points in the quarter to 15.13 percent from 19.93 percent in the last year period.
Gary C. Kelly, chairman of the Board and chief executive officer, stated, "We are delighted to report record annual profits for 2016, our 44th consecutive year of profitability. Our total operating revenues reached a record $20.4 billion, with sustained demand for our legendary low fares and superior Customer Service. Our profit margins were very strong, and our ROIC was a near-record 30.0 percent. Our record profits and balance sheet discipline generated record free cash flow, allowing us to return significant value to our Shareholders. Operationally, our performance was also very solid. We carried a record number of Customers while improving our ontime performance, baggage delivery rate, and net promoter score. My thanks and congratulations to the superb People of Southwest for these outstanding results, which earned them $586 million in profitsharing during 2016.
Operating cash flow improves significantlySouthwest Airlines Company has generated cash of $4,293 million from operating activities during the year, up 32.58 percent or $1,055 million, when compared with the last year. The company has spent $2,272 million cash to meet investing activities during the year as against cash outgo of $1,913 million in the last year.
The company has spent $1,924 million cash to carry out financing activities during the year as against cash outgo of $1,024 million in the last year period.
Cash and cash equivalents stood at $1,680 million as on Dec. 31, 2016, up 6.13 percent or $97 million from $1,583 million on Dec. 31, 2015.
Working capital remains negative
Working capital of Southwest Airlines Company was negative $2,346 million on Dec. 31, 2016 compared with negative $3,382 million on Dec. 31, 2015. Current ratio was at 0.66 as on Dec. 31, 2016, up from 0.54 on Dec. 31, 2015.
Debt moves upSouthwest Airlines Company has witnessed an increase in total debt over the last one year. It stood at $3,387 million as on Dec. 31, 2016, up 6.58 percent or $209 million from $3,178 million on Dec. 31, 2015. Total debt was 14.55 percent of total assets as on Dec. 31, 2016, compared with 14.91 percent on Dec. 31, 2015. Debt to equity ratio was at 0.40 as on Dec. 31, 2016, down from 0.43 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 28.20 for the quarter from 36.64 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
