Southwest Airlines Company (LUV)
Net profit margin
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 465,000 | 497,000 | 581,000 | 658,000 | 539,000 | 827,000 | 996,000 | 584,000 | 978,000 | 2,000 | -1,601,000 | -2,864,000 | -3,074,000 | -1,652,000 | 164,000 | 1,820,000 | 2,301,000 | 2,441,000 | 2,397,000 | 2,389,000 |
| Revenue (ttm) | US$ in thousands | 25,856,000 | 25,202,000 | 24,805,000 | 24,431,000 | 23,395,000 | 22,240,000 | 20,744,000 | 18,041,000 | 15,380,000 | 12,435,000 | 9,655,000 | 6,763,000 | 9,048,000 | 12,764,000 | 16,610,000 | 21,511,000 | 22,426,000 | 22,401,000 | 22,337,000 | 22,170,000 |
| Net profit margin | 1.80% | 1.97% | 2.34% | 2.69% | 2.30% | 3.72% | 4.80% | 3.24% | 6.36% | 0.02% | -16.58% | -42.35% | -33.97% | -12.94% | 0.99% | 8.46% | 10.26% | 10.90% | 10.73% | 10.78% |
December 31, 2023 calculation
Net profit margin = Net income (ttm) ÷ Revenue (ttm)
= $465,000K ÷ $25,856,000K
= 1.80%
The net profit margin of Southwest Airlines Co has shown a downward trend over the past few quarters. In Q1 2022, the net profit margin was at its peak of 4.70%, indicating that the company was able to retain 4.70% of its total revenue as profit. However, since then, the net profit margin has decreased steadily each quarter, reaching 1.78% in Q4 2023.
This decrease in net profit margin could be attributed to various factors such as rising operating expenses, increased competition leading to pricing pressure, or economic challenges affecting the airline industry. A declining net profit margin may raise concerns about the company's efficiency in managing costs and generating profits from its operations.
It is important for Southwest Airlines Co to closely evaluate the reasons behind this decline in net profit margin and implement strategies to improve profitability in the future. Monitoring and analyzing financial ratios like the net profit margin can provide valuable insights into the company's financial performance and help identify areas for improvement.
Peer comparison
Dec 31, 2023