Southwest Airlines Company (LUV) delivered a classic case of "don't focus on the past, look at what's coming" with its Wednesday earnings report. The results were mixed, but the guidance? That's what sent shares soaring after the bell.

The Numbers That Matter

Southwest reported fourth-quarter revenue of $7.44 billion, up 7.4% year-over-year but slightly below the Street's $7.50 billion estimate. Passenger revenue hit $6.8 billion, climbing 7.6% from last year. Both figures were company records for a fourth quarter, which isn't nothing.

On the earnings side, Southwest posted 58 cents per share, just edging past the 57-cent consensus. For the full fiscal year, total revenue reached a record $28.1 billion with earnings of 93 cents per share.

Why Investors Are Excited

Here's where things get interesting. Southwest guided first-quarter earnings to 45 cents per share or higher, crushing the Street estimate of 34 cents. Even better, the full-year outlook calls for $4 or more per share versus analyst expectations of $3.19. That represents a more than 300% year-over-year improvement.

"Notwithstanding the impact of Winter Storm Fern, 2026 is off to a strong start, driven by the Company's Customer-focused product offering, operational excellence, and dramatic progress from the transformational initiatives implemented last year," the company said.

Management emphasized that the airline closed 2025 with "strong momentum," and first-quarter bookings are already reflecting the transformation work done last year.

Market Reaction

Southwest Airlines stock climbed 6.7% to $43.60 in after-hours trading Wednesday, approaching its 52-week high of $45.02. The stock's 52-week range spans from $23.82 to $45.02.