Airline Has Shown A Profit For 43 Consecutive Years

Southwest Airlines has reported an annual profit for the 43rd consecutive year, according to the company's annual report. Fourth quarter profits were a record for the period.

Net income for the 4th quarter was reported to be  $591 million, or $.90 per diluted share, compared with fourth quarter 2014 net income, excluding special items, of $404 million, or $.59 per diluted share, excluding special items. This was in line with the First Call consensus estimate of $.90 per diluted share. The company also reported record annual net income, excluding special items, of $2.4 billion, and record annual profitsharing of $620 million, up 74.6 percent from a year ago.

"We are extremely pleased to report a record annual net income, excluding special items, of $2.4 billion, or $3.52 per diluted share," said Gary C. Kelly (pictured), Chairman of the Board, President, and Chief Executive Officer. "We beat 2014's previous record profit per share by 75.1 percent and produced an all-time high ROIC of 32.7 percent. Record revenues, low fuel prices, and continued cost controls resulted in record operating income of $4.0 billion, and a strong operating margin of 20.1 percent, both excluding special items. We generated strong free cash flow of $1.1 billion in 2015, allowing us to return $1.4 billion to Shareholders. Based on our current outlook, we expect strong free cash flow to continue in 2016 and intend to repurchase an additional $500 million of Southwest common stock under an accelerated share repurchase program, which will be launched soon. I am very thankful to our great Southwest People, and I commend them on these exceptional results, which earned them a record $620 million in profitsharing, up 74.6 percent from 2014's previous record profitsharing contribution of $355 million.

""On the cost side, we continue to benefit from significantly lower jet fuel prices and our fleet modernization. Excluding special items, fourth quarter unit costs declined 6.9 percent year-over-year.

The Company ended 2015 with 704 aircraft in its fleet. This reflects the delivery of 19 new Boeing 737-800s and 24 pre-owned Boeing 737-700s, as well as the retirement of four Boeing 737 Classic aircraft during the year. At the end of December 2015, the Company revised its future firm delivery schedule to reflect 33 additional -800s, and the conversion of its remaining 25 -700 firm orders to -800s. In addition, two pre-owned -700s were added to its delivery schedule.

(Source: Southwest news release)

FMI: www.southwest.com