Southwest Airlines Company (LUV)
Profitability ratios
Return on sales
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 9.97% | 17.91% | 17.84% | 18.55% | 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% |
| Operating profit margin | -0.12% | -1.33% | -1.05% | 0.43% | 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% |
| Pretax margin | 0.85% | -0.06% | 0.49% | 2.04% | 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% |
| Net profit margin | 0.36% | -0.18% | 0.29% | 1.48% | 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% |
The profitability ratios of Southwest Airlines Company have shown fluctuations over the years. The gross profit margin has experienced significant variability, starting at 48.67% in March 2020, dropping to as low as 2.46% in December 2020, and gradually recovering to 18.69% by December 2023. The operating profit margin also exhibited fluctuations, with negative margins in several quarters but showing signs of improvement from March 2023 onwards. The pretax margin followed a similar trend, starting at 10.74% in March 2020, hitting negative figures in subsequent quarters, and showing gradual recovery to 2.04% by March 2024.
The net profit margin, reflecting the company's bottom line, displayed a similar pattern of fluctuations, with negative margins during the pandemic-impacted quarters in 2020 and gradually improving towards positive territory in the following years. Overall, the profitability ratios of Southwest Airlines Company indicate resilience in recovering from the challenges faced during the pandemic and trending towards improved profitability levels in the recent quarters.
Return on investment
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -0.09% | -1.04% | -0.79% | 0.32% | 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% |
| Return on assets (ROA) | 0.29% | -0.14% | 0.22% | 1.09% | 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% |
| Return on total capital | -0.04% | -3.47% | -2.69% | 1.13% | 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% |
| Return on equity (ROE) | 0.96% | -0.47% | 0.74% | 3.85% | 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% |
Profitability ratios provide insight into a company's ability to generate earnings relative to its assets and capital. For Southwest Airlines Company, the trend in profitability ratios from March 2020 to December 2024 showcases fluctuating performance.
1. Operating Return on Assets (Operating ROA):
- Southwest Airlines' Operating ROA plunged from a peak of 8.71% in March 2020 to a low of -11.04% in December 2020 before showing signs of recovery, reaching 5.05% in June 2022. However, it declined thereafter, registering 0.32% in March 2024.
2. Return on Assets (ROA):
- The ROA of Southwest Airlines followed a similar pattern, with the metric dropping from 6.77% in March 2020 to -8.89% in December 2020. The company managed to improve its ROA to 1.09% by March 2024, albeit still below its earlier levels.
3. Return on Total Capital:
- Return on Total Capital saw Southwest Airlines swinging from a high of 26.81% in March 2020 to a low of -43.00% in December 2020. Subsequently, the company's performance improved modestly, recording -0.04% in December 2024.
4. Return on Equity (ROE):
- Southwest Airlines' ROE deteriorated significantly during the period under review, dropping from 20.06% in March 2020 to -34.63% in December 2020. Over time, the ROE recovered slightly to 0.96% by December 2024, reflecting persistent challenges in profitability.
Overall, Southwest Airlines Company faced profitability fluctuations during the analyzed period, with some recovery but continued volatility in key profitability ratios. Investors and stakeholders should monitor the company's financial performance closely to assess its sustainability and growth prospects.