Southwest Airlines (LUV) Falls Despite Fourth-Quarter Net Income Increase

NEW YORK (TheStreet) -- Southwest Airlines (LUV) was falling 2.55% to $21.22 on Thursday despite the fact that the company announced an increase in net income in its fourth-quarter report.

Southwest reported a net income of $212 million for the quarter, up $78 million from the same period one year earlier. The figure surpassed Wall Street's expectations and the company forecast an increase in first-quarter revenue compared to one year earlier.

The airline burned the same amount of fuel but paid 30 cents less per gallon compared to one year earlier, which allowed the Dallas-based company to save $138 million, or 9.2, on fuel. Average fares on a Southwest flight rose 5.4%, or $8, to $156.05 each way.

Southwest CEO Gary Kelly said in the company's statement that traffic slowed early in the fourth quarter because of the federal government's partial shutdown, but traffic and revenue recovered in November and December, a trend that should continue into January as travel bookings are solid for the first quarter.

TheStreet Ratings team rates Southwest as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SOUTHWEST AIRLINES (LUV) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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