Southwest Airlines Company (LUV)
Profitability ratios
Return on sales
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 18.69% | 19.95% | 19.96% | 20.49% | 20.73% | 21.20% | 20.32% | 15.24% | 8.73% | 21.02% | 8.95% | -19.67% | 2.46% | 30.86% | 41.03% | 48.67% | 49.44% | 49.38% | 48.88% | 48.90% |
| Operating profit margin | 0.87% | 0.96% | 2.10% | 3.62% | 4.35% | 7.18% | 9.33% | 7.60% | 11.19% | 2.87% | -18.51% | -51.87% | -42.19% | -15.54% | 1.49% | 10.89% | 13.19% | 13.89% | 13.84% | 13.96% |
| Pretax margin | 2.44% | 2.51% | 3.02% | 3.68% | 3.11% | 4.90% | 6.45% | 4.45% | 8.62% | -0.67% | -23.05% | -58.64% | -47.04% | -17.69% | 0.62% | 10.74% | 13.19% | 13.87% | 13.77% | 13.83% |
| 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% |
Southwest Airlines Co has consistently maintained a strong gross profit margin of 100% throughout the quarters, indicating efficient cost management and pricing strategies. However, the operating profit margin has shown some variability, with a decrease from 7.06% in Q3 2022 to 0.86% in Q4 2023. This suggests potential challenges in controlling operating expenses or generating operating income.
The pretax margin has also fluctuated over the periods, with a peak of 6.32% in Q2 2022 and a low of 2.43% in Q4 2023. This indicates fluctuations in non-operating income or expenses. The net profit margin has followed a similar trend, showing a decrease from 4.70% in Q2 2022 to 1.78% in Q4 2023.
Overall, Southwest Airlines Co has demonstrated consistent profitability, though there are fluctuations in the operating, pretax, and net profit margins. It would be important for the company to closely monitor and manage its operating expenses and non-operational factors to ensure sustained profitability and growth in the future.
Return on investment
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.61% | 0.66% | 1.43% | 2.49% | 2.88% | 4.44% | 5.05% | 3.68% | 4.74% | 0.96% | -4.68% | -9.88% | -11.04% | -5.57% | 0.69% | 8.71% | 11.42% | 11.76% | 11.72% | 11.70% |
| Return on assets (ROA) | 1.27% | 1.34% | 1.59% | 1.85% | 1.52% | 2.30% | 2.60% | 1.57% | 2.69% | 0.01% | -4.19% | -8.07% | -8.89% | -4.64% | 0.46% | 6.77% | 8.89% | 9.22% | 9.09% | 9.03% |
| Return on total capital | 2.13% | 2.20% | 4.83% | 8.58% | 9.52% | 14.62% | 17.40% | 13.16% | 16.53% | 3.48% | -18.45% | -38.58% | -43.00% | -19.99% | 2.82% | 26.81% | 31.31% | 32.54% | 32.21% | 32.64% |
| Return on equity (ROE) | 4.42% | 4.50% | 5.39% | 6.39% | 5.04% | 7.57% | 8.96% | 5.61% | 9.39% | 0.02% | -16.53% | -31.50% | -34.63% | -16.91% | 1.51% | 20.06% | 23.40% | 24.58% | 24.11% | 24.40% |
Southwest Airlines Co's profitability ratios show varying levels of performance over the past eight quarters.
The operating return on assets (Operating ROA) has fluctuated, with a downward trend from Q1 2023 to Q4 2023. This ratio indicates the company's ability to generate profits from its assets before interest and taxes. The decreasing trend may signal lower operational efficiency or profitability in recent quarters.
Return on assets (ROA) has also demonstrated fluctuations but generally remains positive over the period. ROA measures how effectively the company is utilizing its assets to generate earnings. The trend suggests a moderate level of profitability from the total assets employed by Southwest Airlines Co.
Return on total capital has shown a similar pattern of variability, with a notable peak in Q1 2023. This ratio assesses the company's efficiency in generating returns from its total invested capital, including both debt and equity. Despite the fluctuations, Southwest Airlines Co has managed to maintain positive returns on its total capital.
Return on equity (ROE) has displayed a relatively stable performance, remaining positive throughout the period. ROE indicates the company's profitability in relation to shareholders' equity. Southwest Airlines Co has consistently generated returns for its equity holders, although the levels have shown some variability over time.
Overall, the profitability ratios of Southwest Airlines Co suggest a mixed performance, with some indicators showing stability or improvement and others experiencing fluctuations. Analyzing these ratios together provides a comprehensive view of the company's profitability and operational efficiency.