Will LUV's Q1 forecast meet market expectations?

**Southwest Airlines' (LUV) Q1 forecast faces uncertainty in meeting market expectations**. Here's a detailed analysis: 1. **Earnings Projection**: The estimated EPS for Q1 2025 is -$0.17, which suggests a potential loss for the period. This is a notable figure considering the company's historical performance and the broader market expectations. 2. **Revenue Projection**: The estimated revenue for the same period is $6.57 billion. While this is a substantial figure, it may not meet market expectations, especially in light of the company's recent performance and industry trends. 3. **Recent Performance**: Southwest Airlines reported mixed Q4 earnings, with a non-GAAP EPS of $0.56, beating expectations by $0.10. However, revenue fell slightly short of expectations, coming in at $6.9 billion, which is a 1.2% year-over-year increase. This mixed performance indicates that while the company has exceeded earnings expectations, revenue figures are closely watched and may influence market perception. 4. **Guidance Revision**: The company recently revised its Q1 2025 financial guidance, lowering its operating revenue per available seat mile (RASM) guidance by 3 points, now forecasting a 2-4% increase year-over-year. This revision could signal a more cautious outlook from the company, potentially indicating that the Q1 forecast may not meet market optimism. 5. **Market Sentiment**: Despite the earnings beat, concerns over rising labor costs and supply chain risks could impact margins in 2025. These factors, combined with the guidance revision, suggest that while the company has had recent successes, there are underlying risks that could affect performance in the coming quarters. In conclusion, while Southwest Airlines has a history of strong performance, the Q1 forecast does not appear to be overwhelmingly positive, considering the revised guidance and underlying risks. The company's ability to navigate these challenges and meet market expectations will be closely watched by investors.