Southwest Airlines stock drops after a Q1 earnings miss tied to its holiday operations issues

The Yahoo Finance Live team discusses a drop in Southwest Airlines' stock following a challenging holiday season.

Video transcript

- All right, my stock in focus today is LUV, which is not getting a lot of love on Wall Street. Southwest Airlines is who I'm talking about. Down about 3% off the back of its latest quarterly results. The budget airliner posted a $159 million loss in its first quarter. That was more than expected. It was to blame that huge holiday travel mess it had when thousands of flights were canceled between Christmas and the beginning of this year. They thought it was behind them, or you may have thought it was, but I know it's not.

Another hurdle. The Justice Department is now tag teaming with the Department of Transportation, investigating whether it has given timely reimbursements to affected passengers, among other things it is investigating.

- CEO Bob Jordan has his hands full. A lot of the problems there are not of his making, but they are his to clean up. And Boeing is adding to those issues. They expected to deliver 90 737s. They're having to cut that number to 70 because of Boeing's supply chain issues. And they're going to have to moderate hiring because of that. They're probably going to have to cancel flights because of that. One more problem.

Second straight year Southwest Airlines is rated the worst airline in the country by WalletHub. They rated 11 domestic airlines--

- They're not the worst.

- --and it was easy for them to rank Southwest 11 out of 11. And they were the only one to measure 0 in two safety-related categories. There is a lot to clean up there at Southwest.

- There certainly is a lot. And Bob Jordan was doing an interview earlier today, and he did say while he is confident, bookings have improved, he thinks Southwest is moving past it. But they do have more work to do in order to restore some of the confidence that was lost among the consumers. But even with all of that, when you take a look at their demand numbers, it was a pretty strong report. People are still flying Southwest. Despite all the issues that they have had over the last several months, their demand numbers are numbers that they are selling here. Right around the numbers that we saw pre-pandemic. So when you take into account all their issues here, they're still selling tickets, doing it at higher prices.

- I love Southwest. I'm surprised they did so poorly on WalletHub. I mean, have you flown Spirit? Sorry.