Updated from 9:24 a.m. EDTDespite higher fuel costs, Southwest Airlines ( LUV) reported its best quarter ever, a result of fuel hedging and higher ticket prices. The Dallas-based low-fare airline made $333 million, or 40 cents a share, for the quarter ended June 30, up from the year-ago $144 million, or 18 cents a share. Excluding a hedging-related gain, latest-quarter earnings were 33 cents a share, 7 cents ahead of the Thomson Financial analyst consensus estimate. Revenue rose 26% from a year ago to $2.45 billion, breezing past the $2.3 billion Wall Street view. "It has been six difficult years since our last quarterly earnings record," when the airline earned $190.6 million in the second quarter of 2000, said CEO Gary Kelly on a conference call. He attributed the airline's success to a growing economy, fuel hedging that provided a $225 million benefit, fare increases and capacity reductions by competitors, chiefly by Independence Air, whose January shutdown led to increased traffic on Southwest flights in Baltimore. Kelly said he now feels that Southwest's target of 15% earnings growth this year, initially viewed by analysts as too optimistic, will be easily met. And he set a similar 15% earnings growth goal for 2007, though he insisted the number is a goal, not a forecast. Southwest is seeking to buy more Boeing 737-700s, he said. He would like to buy as many as 20, though he realizes that goal is unattainable because Boeing's new planes are spoken for until 2010. Southwest will take delivery of 34 planes this year and 35 in 2007. Kelly said more are needed in many of the airline's existing markets, not to mention new markets it would like to serve. Additionally, Kelly noted that fare increases are causing booking slowdowns in select markets, which he declined to specify.