Higher Fares Help Boost Southwest Airlines' Profit

southwest airlines earnings
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Higher fares are helping Southwest Airlines make more money than Wall Street expected, but the company says automatic federal spending cuts could hurt revenue in April.

The average passenger fare on Southwest is now more than $150 one-way, 4 percent higher than a year ago.

Southwest Airlines Co. (LUV) said Thursday that first-quarter net income was $59 million, or 8 cents a share. That's down from earnings of $98 million, or 13 cents a share, a year ago.

Without gains from fuel-hedging contracts, Southwest would have earned 7 cents a share, topping analyst forecasts of 2 cents a share.

The airline says revenue was weaker than expected in March and that's continuing in April. The company says it's "cautious" because of the effect of federal spending cuts, but that recent bookings for May and June are solid.

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