Southwest Airlines chief financial officer Tammy Romo told an investor conference Thursday that the airline’s unit revenues were up an estimated 3 percent in October.
Tammy Romo (Southwest Airlines)
“Revenue momentum has continued into the fourth quarter, and we continue to see favorable trends,” Romo told the Raymond James conference. “We will be releasing our October traffic results on Monday, but we currently expect our October passenger unit revenue to be up at least 3 percent year over year.”
This is of some significance because the market took it badly two weeks ago when the carrier estimated that October unit revenues would be up only 2 percent.
Southwest’s shares dropped 95 cents, or 2.8 percent, to $33.25 that day, even though it came as the Dallas carrier reported record earnings for a third quarter.
On the Oct. 23 earnings call, analyst Jamie Baker of J.P. Morgan took note that the stock was taking a hit – down 5 percent at one point that day – and asked Romo if there was anything to explain the unit revenue increase of only 2 percent.
“Well, nothing,” Romo said. “Really, Jamie, if you look at, there is really nothing unusual that’s standing out in our comps, if you look at it. If you look at our performance from September relative to October, there is really nothing odd there in sequential. And again, there is some noise in the year-over-year comparison. So aside from that, nothing really stands out.”
Southwest’s shares have recovered from the Oct. 23 dip. Wednesday’s close was $36.75, up $3.50 or 10.5 percent from the Oct. 23 close.
As of 10:55 a.m. Thursday, shares had climbed another 77 cents, or 2.1 percent, to $37.52. Just before that, it had hit an all-time high for the company’s shares at $37.53.