Shares of Southwest Airlines Co. sank 4.5% in premarket trade Thursday, after the air carrier reported first-quarter profit and revenue that missed expectations. Net income fell to $351 million, or 57 cents a share, from $513 million, or 79 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 61 cents, below the FactSet consensus of 63 cents. Revenue rose 1.2% to $4.88 billion from $4.83 billion, but missed the FactSet consensus of $4.93 billion. Revenue per available seat mile (RASM) declined 2.8%, due primarily to the competitive fare environment and shift in Easter travel demand. Unit costs increased because of higher fuel costs and pay increases because of amended union contracts. The company expects RASM to be positive in the second quarter, and continues to target growth for the year. The stock has rallied 14% year to date through Wednesday, while the NYSE Arca Airline Index has tacked on 2.3% and the S&P 500 has gained 6.6%.
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