Southwest Airlines Co. (NYSE: LUV) reported second-quarter 2015 results before markets opened on Thursday. The low-cost carrier reported adjusted EPS of $1.03 on revenues of $5.1 billion. In the second quarter of 2014, the airline posted EPS of $0.67 on revenues of $5.01 billion. Analysts were expecting Southwest to post second-quarter EPS of $1.02 on revenues of $5.14 billion.

In May, Southwest expanded its international service and changed an order for 31 Boeing 737-700s to larger 737-800s. On the same day, the airline also increased its dividend by 25% and authorized a new $1.5 billion share buyback program, and it said it plans an accelerated repurchase program of $300 million. The company bumped up the accelerated repurchase plan to $500 million Thursday.

CEO Gary Kelly said:

Overall, our network performance is exceptional. For this year, we are growing our [available seat miles] ASMs approximately seven percent, year-over-year. The annualized impact of our 2015 expansion is expected to contribute the majority of 2016’s year-over-year capacity growth. As we continue to optimize our network, we are currently planning to grow our total 2016 ASMs in the five to six percent range, year-over-year, with the goal to sustain strong margins and [return on invested capital] levels in line with 2015

Second-quarter 2015 fuel costs came in at $2.02 per gallon, including $0.08 per gallon in unfavorable cash settlements from fuel derivative contracts, compared with $3.02 per gallon in the same period last year, which included $0.05 per gallon in favorable cash settlements from fuel derivative contracts. Excluding fuel and special items, second-quarter operating costs rose 6.9% compared with the second quarter of 2014. Including fuel and all other costs, operating costs rose 5.1% year over year and decreased 1.8% on a unit basis.

Unit revenues declined 4.7% in the second quarter, driven primarily by a 5.4% drop in passenger revenue yields. For the third quarter, Southwest expects unit revenues to decline by 1% year over year.

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Analysts are looking for third-quarter EPS of $0.86 on revenues of $4.99 billion. For the full 2015 fiscal year, EPS is pegged at $3.34 on revenues of $19.4 billion.

Southwest’s shares traded up about 4.8% in Thursday’s premarket, at $36.80 in a 52-week range of $27.42 to $47.17. The consensus price target on the stock is $47.68.

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