NEW YORK (TheStreet) -- Shares of Southwest Airlines (LUV) are falling 8.64% to $38.40 after the company reported 2016 second quarter earnings lower than analysts' estimates, numbers that TheStreet's Jim Cramer says are "shocking" in the above video.
The company reported adjusted earnings of $1.19 per share and revenue of $5.38 billion, missing Wall Street's expectations of earnings of $1.21 per share and revenue of $5.41 billion.
"While solid traffic demand has continued into July, thus far, the far environment remains challenging, and close-in yields have softened in recent weeks," said CEO Gary Kelly in a company statement.
Southwest's unit revenue, or the amount earned per seat flown per mile, rose 0.6% from the 2015 second quarter. Across the industry, unit revenues have been in decline due to rapid expansion.
Kelly characterized the past quarter as one of "record profits, strong margins, and healthy cash flows."
Southwest is a Dallas-based passenger airline company.
Separately, TheStreet Ratings rated this stock as a "buy" with a ratings score of B+.
The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, increase in net income, expanding profit margins and good cash flow from operations.
TheStreet Ratings feels its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: LUV
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.