January 25, 2018 / 11:47 AM / a year ago

Higher passenger volumes drive Southwest profit beat

FILE PHOTO: A Southwest Airlines plane is seen at Los Angeles International Airport (LAX) in the Greater Los Angeles Area, California, U.S., April 10, 2017. REUTERS/Lucy Nicholson/File Photo

(Reuters) - Southwest Airlines Co (LUV.N) edged past expectations for fourth quarter profit on Thursday, helped by a small increase in unit revenue per seat driven by higher overall passenger numbers.

The Dallas-based carrier said it expects first-quarter unit revenue, which compares ticket sales with flight capacity, to increase in the 1-2 percent range, compared to last year.

In the fourth quarter ended Dec. 31 the measure rose 1.9 percent.

Average passenger fares, however, were down 2.7 percent and shares of Southwest dipped in premarket trading after a torrid Wednesday for airline stocks driven by growing fears of a price war in the sector.

The fourth-largest U.S. airline by passenger traffic said net income rose to $1.89 billion , or $3.18 per share, from $522 million, or $0.84 per share, a year earlier.

That was largely driven by a $1.4 billion benefit due to tax reform legislation.

Operating revenue, however, also rose 3.9 percent to $5.27 billion.

Excluding items, the company earned $0.77 a share, versus analysts’ expectations of $0.76 per share, according to Thomson Reuters I/B/E/S.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Patrick Graham

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