Updated from 9:28 a.m. EDT

Even Southwest Airlines ( LUV) had trouble avoiding a turbulent second quarter for the industry.

The low-cost carrier posted its 53rd consecutive quarter with a profit Thursday, but missed Wall Street estimates and said comparisons would be tougher going forward. The company's CEO announced his retirement shortly after the results were disclosed.

Southwest, the first airline to announce second-quarter earnings, reported net income of $113 million, or 14 cents a share, which missed the 16-cent analyst estimate and came in more than half the $246 million, or 30 cents a share, it had a year ago, when a $143 million government grant boosted net earnings. Excluding all items, the carrier earned $103 million, or 13 cents a share, a year ago.

Total operating revenue came in at $1.72 billion, topping the Wall Street estimate of $1.66 billion and up 13.3% from the $1.52 billion it had a year ago. Traffic, a demand metric measured in revenue passenger miles, rose 14.1%, while capacity, a supply metric measured in available seat miles, rose just 4.9%.

Shares of the low-cost carrier fell 30 cents, or 2%, to $14.96.

With supply constrained and demand rising, the carrier's load factor, or the percentage of seats filled on every flight, came in at 76.3% in the second quarter, up from 70.1% last year. But with airlines slashing prices to stimulate demand, the amount of money the airline took in per paying customer, measured in yield, continued to fall. Southwest said yield fell 1.1% in the quarter to 11.54 cents per revenue passenger mile.

"Considering the difficult airline industry revenue environment, we are pleased with our second-quarter revenue and traffic results," said CEO James Parker in a statement. "Our 2004 load factor increased 6.2 points to 76.3% and was a record performance. Thus far, favorable load factors and unit revenue trends have continued in July."

Expenses continue to rise, despite the fact Southwest has the large majority of its fuel needs hedged and isn't as vulnerable to spikes in the price of oil. The carrier said expenses came in at $1.52 billion, up 10.5% from last year, with cost per available seat mile, or CASM, coming in at 8.09 cents, up 5.3% year-over-year.

Going forward, the company said that bookings for the rest of July and August were high and recent fare sales were driving demand for September, not traditionally a busy season for the carrier. But with comparisons getting tougher in the third quarter, Southwest cautioned that revenue and earnings growth would grow at a slower pace and said revenue per available seat mile, or RASM, would fall below the 9.14 cents seen in the second quarter.

Despite the tougher comparisons, Southwest said it was on track to beat the profit of 13 cents a share it had during last year's third quarter, en route to what would be its 54th straight quarter with a profit. But with Wall Street expecting the carrier to earn 16 cents a share, earnings estimates could come down.

Look for more quarterly results from airlines next week, but don't look for profits -- analysts still expect the industry to post losses, despite the fact the second quarter is seasonally strong. Delta Air Lines ( DAL) releases on Monday, followed by Continental Airlines ( CAL) on Tuesday and Northwest Airlines ( NWAC) on Wednesday.

Quarterly results from Southwest peer JetBlue ( JBLU) hit the market on Thursday, with AirTran ( AAI) releasing on July 27.

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