but Airlines not the best sector right now..IMHO..
So what is the best sector now????? LUV has performed in the sector despite problems with all of the other carriers. They announced a profit for the quarter yesterday which, I believe, was the only profitable airline for the quarter.
Southwest which blamed weaker demand for full-fare travel, said it earned $102.3 million, or 13 cents a share, vs. $175.6 million, or 22 cents a share, in the second quarter of 2001.
Earnings declined from $175.6 million recorded in the prior-year period, due to continuing weakness in revenues from reduced fare levels, with unit revenues (as measured by yield) declining by 9.3%. Unlike other airlines, Southwest has continued to add capacity since the events of Sept. 11, 2001 (increasing 4.4% versus 2001 levels), and this is reflected in its strong unit cost performance, with unit costs (excluding fuel) declining by 0.6%. The company has indicated it expects revenues and earnings comparisons to continue to be negatively impacted for the foreseeable future. Southwest's liquidity and financial flexibility remain strong for an airline, with cash of $2.1 billion at June 30, 2002; a fully available $575 million bank facility; and most of its aircraft unencumbered. Lease-adjusted debt to capital in the low-40% area is, by far, the lowest in the industry.
I have owned and made money on LUV several times, but hate it as a passenger and fly it by default when there are no other choices. Kind of like taking a Greyhound bus, but I don't shop at Walmart either and they sure know how to run a profitable company.
As we approach the year low of 11.25 for LUV I become more
interested, and will jump in for sure if it goes below 12.
Rap |
