STOCK GOODIES PLAYS OF THE WEEK

[ManicTrader]

$LUV Southwest Air: In line 4Q10 EPS; 2011 cost hurdles & revenue increases - Dahlman Rose (12.79 )

Dahlman Rose notes LUV reported in line 4Q10 EPS yesterday compared to the consensus estimate but slightly below firm's forecast. Co has cost headwinds in 2011 with jet fuel expectations at the high end for the industry. Management expects jet fuel prices to be in the range of $2.80 to $2.85 for 2011 and unit costs excluding fuel to be up by 2%. Revenues will have a tough time keeping pace with these increases as comps get more difficult through the year. Firm forecasts 1Q11 EPS of a loss of $0.01, compared to the consensus of $0.06. For 2011, it forecasts EPS of $0.71, down from its prior estimate of $0.90 and compared with the consensus of $0.90.