Southwest Airlines Co. reported Thursday that net income rose in the second quarter but its operating profit fell sharply. Adjusted earnings _ excluding items such as gains from fuel-hedging contracts _ missed expectations.
The addition of AirTran Airways, which Southwest bought in May, distorted some of the comparisons. Both revenue and costs were greatly increased because of the acquisition.
Highlights from the numbers:
_ Net income rose to $161 million, or 21 cents per share, compared with $112 million, or 15 cents per share, a year earlier.
_ Adjusted earnings excluding special items fell to $121 million, or 15 cents per share, compared with $216 million, or 29 cents per share, a year ago. Analysts surveyed by FactSet expected 21 cents per share.
_ Revenue climbed to $4.14 billion from $3.17 billion a year ago, when AirTran wasn't part of the company. Analysts expected $4.10 billion.
_ Fuel spending jumped 64 percent, to $1.53 billion. Adding AirTran's 2010 fuel bill to the mix, the increase was 32 percent, in line with most other large U.S. airlines.
_ Passenger-carrying capacity will be flat to down next year. Southwest officials said they had planned for a 4 percent increase, but changed their minds because of a "pessimistic" outlook for the U.S. economy and fuel prices. Southwest expects 2011 capacity will be 4 percent to 5 percent higher than last year.