UPDATE: Southwest Airlines Posts Better-Than-Expected Q3 Profit

Southwest Airlines Co

reported stronger-than-expected earnings for the third quarter. The Dallas, Texas-based company posted quarterly net income of $329 million, or $0.48 per share, compared to $259 million, or $0.37 per share, in the year-ago period. Excluding special items, the company earned $0.55 per share. Its revenue rose 5.6% to $4.8 billion. However, analysts were expecting a profit of $0.53 per share on revenue of $4.79 billion. Passenger revenue rose 4.9% on a unit basis to $4.6 billion. The average one-way fare rose to $160.74. Fuel spending slipped 4.4%, while labor costs increased 7.2% in the quarter. Operating expenses in quarter rose 0.7% to $4.2 billion, while operating income increased to $614 million from $390 million. As of September 30, 2014, Southwest Airlines had $3.6 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. During the quarter 2014, the company repurchased $200 million in common stock. Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, "We are very pleased to report another record quarterly profit performance, which resulted in a $100 million third quarter 2014 profitsharing expense for our Employees.” Southwest Airlines shares rose 1.90% to $34.85 in pre-market trading.