Low-cost carrier Southwest Airlines said Wednesday that its fourth-quarter profit rose 54 percent despite an unexpected security expense, driven by higher revenue and its cost control efforts.
Net income rose to $86 million, or 10 cents per share, for the three months ended Dec. 31 from $56 million, or 7 cents per share, in the fourth quarter of 2004. Excluding one time items, net income was $98 million, or 12 cents per share.
The air carrier said results were hurt by $24 million in added 2005 federal airport security expenses due to a retroactive assessment by the Transportation Security Administration, which were unexpected, and which the company said it intends to contest.
Revenue increased 20 percent to $1.99 billion from $1.66 billion, a year earlier.
Analysts surveyed by Thomson Financial expected the company to earn 13 cents per share on sales of $1.95 billion.
For the full year 2005, net income totaled $548 million, or 67 cents per share, compared with 2004 net income of $313 million, or 38 cents per share. Excluding items, profit totaled $489 million, or 60 cents per share. Full-year revenue rose to $7.58 billion from $6.53 billion.
The company said its 2006 outlook is "favorable," but said the shift in timing of the Easter holiday into April this year versus March last year will weigh on its first quarter results.
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The company said hedged jet fuel cost per gallon increased almost 30 percent during the quarter.
Increased passenger demand and reduced labor expenses help offset soaring fuel costs.