Southwest Airlines (NYSE: LUV) Earnings Preview: Navigating Fuel Costs and Operating Expenses

• Southwest Airlines (NYSE: LUV) faces varied earnings estimates, with revenue outlook supported by strong bookings.
• Rising fuel costs, labor expenses, and overall operating costs pose significant risks to profitability.
• Despite a history of beating earnings estimates, the airline's current ratio indicates short-term liquidity challenges.

Southwest Airlines (NYSE: LUV) is expected to report earnings after the market closes on Wednesday, October 21, 2026. Wall Street estimates earnings of $0.57 per share on revenue of about $8.25 billion. The airline carries passengers across the United States and competes with carriers such as American Airlines (NASDAQ: AAL).

Other forecasts are slightly higher. Zacks Investment Research cites expected earnings of $0.61 per share, up 454.60% from a year earlier, and revenue of $8.26 billion, up 18.80%. Strong bookings support the revenue outlook, but the different estimates show that expectations vary.

Fuel costs are a key risk. Brent crude is above $110.00 a barrel, which could raise jet fuel bills for Southwest and American Airlines, as highlighted by 24/7 Wall Street. Strong passenger demand could help Southwest cover some of those costs, though higher spending would leave less revenue as profit.

Labor and airport expenses add to the pressure. Operating costs are projected to rise 9.10%, as highlighted by Zacks Investment Research. Zacks also reports downward changes of 23.40% and 11.59% to consensus earnings estimates in separate previews. A consensus estimate is the average of analysts’ forecasts.

Southwest has beaten earnings estimates in three of the past four quarters and matched them once, as highlighted by Zacks Investment Research. Its trailing price-to-earnings ratio is 23.90, meaning the stock price is 23.90 times its earnings over the past year. Its current ratio is 0.49, meaning short-term assets cover less than half of short-term liabilities.