Southwest Airlines (LUV) reported its second-quarter results after the bell on Wednesday, and while the numbers were a mixed bag, the real story is what the airline sees ahead. Shares slid about 2% in after-hours trading as the company's third-quarter guidance came in lighter than Wall Street had hoped.

Let's start with the headline numbers. Southwest posted Q2 revenue of $8.43 billion, which was a bit shy of the $8.58 billion analysts were looking for. But on the earnings front, the airline delivered adjusted earnings per share of 94 cents — well above the 51-cent consensus. That's a beat, and a pretty solid one at that.

Revenue for the quarter climbed 16.4% year-over-year, and a key metric — revenue per available seat mile (RASM) — rose 16.2% from a year ago. For the third quarter, Southwest expects RASM to grow between 17.5% and 19.5%, so the momentum is continuing.

CEO Bob Jordan sounded upbeat about the quarter, saying in a statement: "Second quarter results demonstrate the earnings power of our business. We delivered results well ahead of consensus expectations despite nearly $900 million of additional fuel expense year-over-year." That's a lot of extra fuel cost to swallow, and the airline still managed to beat profit forecasts.

Southwest ended the quarter with $5.3 billion in liquidity, including $3.8 billion in cash and equivalents and a $1.5 billion revolving credit line. So the balance sheet looks solid.

Now for the part that spooked investors. For the third quarter, Southwest guided for adjusted earnings of 50 to 75 cents per share. That's below the 82 cents analysts had penciled in. For the full year 2026, the company sees adjusted earnings of $3.25 to $4.25 per share, which brackets the $3.17 consensus estimate. So the full-year outlook is actually a bit better than expected, but the near-term softness in Q3 is what's driving the after-hours dip.

Jordan added: "Our focus now turns to unlocking the company's full earnings potential by continuing to optimize our network, product offering, and pricing, while continuing to strengthen financial performance."

Southwest executives will discuss the quarter in more detail on an earnings call Thursday at 10 a.m. ET. Investors will be listening for more color on how the airline plans to close the gap between its guidance and Wall Street's expectations.

At the time of publication, shares were trading at $46.66 in after-hours trading, down 2.06%.