Southwest Airlines Company (LUV)
Return on equity (ROE)
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 99,000 | -49,000 | 77,000 | 393,000 | 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 |
| Total stockholders’ equity | US$ in thousands | 10,350,000 | 10,411,000 | 10,465,000 | 10,196,000 | 10,515,000 | 11,054,000 | 10,789,000 | 10,302,000 | 10,687,000 | 10,924,000 | 11,120,000 | 10,417,000 | 10,414,000 | 10,250,000 | 9,688,000 | 9,093,000 | 8,876,000 | 9,769,000 | 10,878,000 | 9,075,000 |
| 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% |
December 31, 2024 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $99,000K ÷ $10,350,000K
= 0.96%
Southwest Airlines Company's return on equity (ROE) has displayed significant fluctuations over the past few years. In the first quarter of 2020, the ROE was strong at 20.06%, indicating efficient use of equity to generate profits. However, in the subsequent quarters of 2020, the ROE turned negative, reaching its lowest point of -34.63% in the fourth quarter of 2020. This negative trend continued into the first half of 2021 but started to improve gradually from the third quarter of 2021 onwards.
From the third quarter of 2021 to the second quarter of 2022, the ROE showed a positive upward trend, reaching a peak of 8.96% in the second quarter of 2022. Subsequently, the ROE fluctuated around this level, remaining above 4% in the following quarters.
Overall, despite the fluctuations, Southwest Airlines Company managed to improve its ROE from the negative territory in 2020 to single-digit positive percentages in 2022 and 2023. It is essential for investors and stakeholders to monitor this key financial metric closely to assess the company's profitability and efficiency in generating returns for its shareholders.
Peer comparison
Dec 31, 2024