On July 23, Southwest Airlines fell 5.27% in regular trading, trading at $45.105/share, with turnover of $130 million. The decline came after the company released Q2 earnings pre-market, revealing a mixed picture overshadowed by weak forward guidance.

Southwest Airlines reported Q2 adjusted EPS of $0.94, significantly beating the consensus estimate of $0.51, while revenue of $8.43 billion slightly missed the $8.58 billion estimate. However, Q3 adjusted EPS guidance of $0.50-$0.75 fell short of the analyst projection of $0.79. Fuel expenditure surged 67% year-over-year to $2.22 billion, dragging adjusted EPS by approximately $1.17, as US-Iran conflict drove jet fuel price volatility higher. Average one-way fares rose nearly 21% to $225.61, but the pricing gains were largely offset by fuel headwinds. The company expects Q3 fuel costs of $3.70-$3.75 per gallon based on forward curves as of July 17.

The broader airline sector faced significant selling pressure, with American Airlines down 7.93%, Alaska Air down 4.16%, and United Airlines down 3.91%.

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