Southwest Airlines Co. on Thursday said first-quarter profit rose modestly as higher jet fuel costs somewhat offset strong revenue growth, driven by increased passenger traffic and expanded capacity.
Earnings edged 3 percent higher to $61 million, or 7 cents a share, for the three months ended March 31 from $59 million, or 7 cents a share, a year ago.
Revenue totaled $2.02 billion in the quarter, up 21 percent from $1.66 billion in the prior-year period.
Analysts polled by Thomson Financial expected Southwest to earn 7 cents per share on $1.96 billion in sales.
"Despite soaring energy costs, this represented another quarter of strong earnings growth and stellar performance by the people of Southwest Airlines," said Southwest Chief Executive Gary C. Kelly.
Passenger traffic in the first quarter jumped 15.4 percent to 15.28 billion revenue passenger miles. A revenue passenger mile is equal to one paying passenger flown one mile.
Capacity increased 9.1 percent over the three-month period to 22.08 billion available seat miles. Load factor, or occupancy, rose 3.8 points to 69.2 percent.
"Thus far, strong load factor and revenue trends have continued in April, and customer bookings for the remainder of second quarter 2006 are strong," Kelly said.
Shares of Southwest fell 56 cents to $16.80 in midday trading on the New York Stock Exchange, where thay have traded in a 52-week range of $13.05 to $18.20.
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Quarterly profit rose to $227 million with $87 million in one-time gains from its hedging strategy.
The company said hedged jet fuel cost per gallon increased almost 30 percent during the quarter.