Southwest Q2 sales and earnings fall short of Wall Street estimates

One month of raking in bag fees wasn’t exactly enough to lift Southwest Airlines to cruising altitude.

The airline reported earnings after the bell on Wednesday and said it expects its full-year earnings before interest and taxes to land between $600 million and $800 million. Along with rivals Delta Air Lines and American Airlines, Southwest had pulled its annual guidance earlier this spring.

Southwest shares were up 0.2% after-hours. Likely encouraging investors was a new $2 billion share buyback plan over the next two years and Southwest’s statement that “recent industry demand shows signs of improvement off of depressed second quarter 2025 levels.”

Southwest posted earnings per share of $0.39, below expectations of $0.51 per analysts polled by FactSet and down more than 30% from the same period last year. Its Q2 sales reached $7.24 billion, shy of the $7.29 billion expected by the Street.

Despite all the cost cutting Southwest’s been up to since ceding board seats to activist investor Elliott Management in October, its nonfuel costs per seat mile climbed 4.3% on the quarter, in line with its own expectations. Southwest expects those costs to climb between 3.5% and 5.5% in the current quarter.