DALLAS (AP) - Southwest Airlines Co. said Tuesday that it would take a charge of $25 million in the third quarter to cover early retirement payments to employees.
Southwest said its third-quarter costs would rise 4 to 5 percent compared with a year earlier.
Higher costs could drag quarterly profits below Wall Street expectations, said Jamie Baker, an analyst with JP Morgan.
Analysts expect Southwest to post a profit of 22 cents per share when it reports July-September results next month, according to a survey from Thomson Financial.
Baker said the charges appeared limited to Southwest, not broader airline industry. The sector took a beating Monday when American Airlines' parent, AMR Corp., issued a disappointing outlook for third-quarter revenue.
In a regulatory filing, Southwest said the one-time, pretax charge of $25 million was related to a buyout accepted by 608 of the 8,500 employees who were eligible.
Southwest said the early retirements of higher-paid employees will save the company $20 million per year through 2012.
The Dallas-based airline also said it expects to take a charge of about $15 million for its fuel-hedging program.
Shares of Southwest fell 18 cents, or 1.2 percent, to $14.81 Tuesday. AMR shares rebounded 78 cents, or 3.8 percent, to $21.55.
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