Southwest Airlines (LUV) Reveals Some Scary News

One would think that Southwest Airlines reporting a 35% increase in quarterly profits would send shares flying. The airline reported $820 million in profits for the second quarter of 2016 — up from $608 million during the same period last year.

Well, investors didn’t seem that impressed by the news, as the stock fell hard on Thursday morning despite the increase in profits.

Shares of Southwest Airlines fell as much as 9% in morning trading after the airline warned it is expecting unit revenue to fall as much as 4% next quarter due to lower ticket prices and greater levels of competition.

It was just earlier in the week that another big airline, United Airlines, reported experiencing pressure from lower tickets prices and greater competition during the second quarter of 2016.

Disclaimer: We have no position in Southwest Airlines Co (NYSE: LUV) and have not been compensated for this article.

Sofia Vida

Sofia has been writing for major news outlets for over 15 years. In her spare time she enjoys hiking, walking her dogs, and going to concerts.

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