Southwest Airlines reported better-than-expected quarterly earnings and revenue, and progress across its turnaround efforts, but the carrier again lowered its profit outlook because of rising jet fuel costs.

Investors have been eager to hear how the carrier was progressing on its turnaround. Southwest CEO Bob Jordan said that customers are responding to Southwest's enhanced offering.

"Demand remained strong as we lapped last year's bag fee and other commercial initiatives, reinforcing our belief that the earnings power we've built is durable, even with significantly higher fuel costs," Jordan said.

"We remain confident in our ability to further strengthen earnings, improve returns, and expand margins over time," he added.

But Southwest's fourth-quarter forecast for adjusted earnings of 55 cents to 80 cents a share was below the 81 cents a share Wall Street projected. And its full-year guidance for adjusted earnings of $2.60 to $2.85 a share was below the $2.83 a share analysts expected, and less than the $3.25 to $4.25 range it had forecast during second-quarter earnings in July.

Southwest began the year guiding for full-year earnings of "at least" $4.00 a share, representing the lower end of its internal forecasts, which was still above the consensus view of $2.70 a share.

Southwest shares rose slightly in premarket trading Thursday after closing up 0.6% at $39.88 in regular trading Wednesday. The stock has fallen 4.2% this month and down 3.5% this year, putting it on pace for the worst year since 2023 when it fell 14.2%, according to Dow Jones Market Data.

For the third quarter ended in September, Southwest reported adjusted earnings of 66 cents a share on operating revenue of $8.4 billion, up 21.2%, and a third-quarter company record.

Wall Street was expecting adjusted earnings of 57 cents a share on revenue of $8.25 billion, according to FactSet. That was up from 11 cents a share on revenue of $6.95 billion in the third quarter of 2025.

Southwest said third-quarter passenger revenue set a record, as did passenger yield, and that unit revenue increased 21.6%, also a record.

Both Delta Air Lines and United Airlines Holdings cited soaring jet fuel prices in their earnings reports. Delta reported record third-quarter revenue of $17.6 billion, up 16% from a year ago, but adjusted earnings of $1.72 a share missed earnings expectations. Delta also cut its full-year earnings guidance, saying it expects a $6 billion increase in fuel costs this year, despite being the only carrier with a refinery to offset some of that impact.

United on Tuesday reported a slightly lower-than-expected adjusted profit of $2.54, and a 17.4% increase in operating revenue, to $17.9 billion, despite a 62% rise in fuel costs.

Southwest said its fuel costs increased to an average of $3.92 a gallon, above prior assumptions of $3.70 to $3.75 a gallon, and above analysts' expectations for $3.89 a gallon. Its fuel costs increased by $821 million compared with the previous third quarter, and were a $1.08 headwind to adjusted earnings per share.

Like other airlines, Southwest is trying to woo more premium travelers. Last week it unveiled what it called the next evolution of its Rapid Rewards loyalty program, including rebranding its A-List and A-List Preferred tiers to Silver and Gold, respectively, and introducing a Platinum level that includes unlimited companion pass tickets. The new tiers begin Jan. 1.

Southwest is also launching a new Southwest Rapid Rewards Credit Card from Chase Bank that includes access to its Southwest Icon Lounges starting in 2027.